The United States Securities and Exchange Commission (SEC) has reportedly decided not to appeal the recent court’s decision regarding a case between the federal securities regulator and Grayscale Investments. 

In a high-profile ruling on August 29, the US District of Columbia Court of Appeals granted the prominent asset manager’s request to convert its Grayscale Bitcoin Trust into a spot Bitcoin exchange-traded fund (ETF) following an initial denial by the SEC.

While there may have been speculations about the US regulator potentially mounting a challenge to this ruling, a Friday report by Reuters states that the SEC would not be taking that route, according to a source close to the matter. 

SEC Accepts To Review Grayscale ETF Application

Based on the report quoted above, the SEC is now mandated to review Grayscale’s application to convert its GBTC fund into a spot Bitcoin ETF. However, it is worth noting that this development does not result in an automatic approval of the said ETF bid.

Furthermore, the US appeals court is still expected to issue a directive that outlines how its recent ruling should be implemented between the concerned parties. 

Commenting on this report, Bloomberg analyst James Seyffart posted on X, stating his agreement with the notion that the SEC will not be pushing for an appeal in this case. 

In addition, Seyffart said there could be more development on the said ETF application as discussions between Grayscale and the SEC are set to commence next week. 

Bloomberg Analysts Remain Positive On Spot Bitcoin ETF Approval

In another post on X on Friday, James Seyffart, in collaboration with his colleague Eric Balchunas, emphasized their positive stance on the outcome of the ongoing spot Bitcoin ETF saga in the US. 

Related Reading: Bitcoin Spot ETF: Bloomberg Analyst Reevaluates Odds After Ark’s Delay

Back in August, the Bloomberg ETFs analyst had estimated the chances of approval of a spot Bitcoin ETF at 75% in 2023 and 90% by the end of 2024. 

In Friday’s post, both analysts maintained this optimism, however, with regard to recent changes in the joint ETF filing by Ark Invest and 21 shares. 

I’ve gotten a lot of questions regarding my current view on Spot #Bitcoin ETFs over the last couple weeks. This is the first section of the note I put out yesterday with @EricBalchunas.

TLDR: Our view hasn’t changed much https://t.co/dRAm5IsdQf pic.twitter.com/Htsi3n2XxV

— James Seyffart (@JSeyff) October 13, 2023

Seyffart and Balchunas noted that the ARK 21Shares Bitcoin ETF filing had been updated with 5 new pages, a move which signaled “constructive conversation” with the SEC, which typically indicates that an investment fund could soon gain approval. 

Based on this development, the Bloomberg analysts stated there is a 90% chance that the US regulator will approve the ARK 21shares Bitcoin ETF bid by its final deadline of Jan 10, 2024. 

In the past, the SEC has rejected multiple spot Bitcoin ETF filings highlighting the applicant’s inability to show how they intend to protect investors from market manipulation. 

Many asset managers have now come up with a response to this requirement, with some, including Ark/21Shares, opting for a surveillance-sharing arrangement with America’s largest crypto exchange, Coinbase.