Grayscale wins court battle against SEC; Bitcoin jumps 6% within first hour after ruling

In a landmark ruling on August 29, 2023, the United States Court of Appeals for the District of Columbia Circuit vacated an order from the Securities and Exchange Commission (SEC), granting Grayscale Investments LLC a long-awaited victory in its lawsuit over the conversion of its Bitcoin Trust into a spot Bitcoin exchange-traded fund (ETF).

The SEC rejected Grayscale’s initial application to convert the Grayscale Bitcoin Trust to a spot Bitcoin ETF on June 29, 2022. Grayscale argued that the SEC acted “arbitrarily and capriciously” in rejecting spot Bitcoin ETF applications, especially considering it had approved Bitcoin futures ETFs. Grayscale claimed that the SEC violated the Securities Exchange Act with its “unfair discrimination” against spot Bitcoin ETF issuers.