SEC’s Alternative Arguments Could Pose Hurdles for Bitcoin ETF Approval – Berenberg Report

The post SEC’s Alternative Arguments Could Pose Hurdles for Bitcoin ETF Approval – Berenberg Report appeared first on Coinpedia Fintech News

the U.S. Securities and Exchange Commission (SEC) is reportedly considering alternative arguments to reject applications for spot Bitcoin exchange-traded funds (ETFs), as indicated by a recent report from German investment bank Berenberg.

Despite the recent legal victory achieved by Grayscale, which seemed to boost the prospects of SEC’s approval for spot Bitcoin ETFs, the SEC’s potential new stance could create significant challenges for the trajectory of Bitcoin’s price. Despite a commendable 60% surge in value this year, Bitcoin (BTC) has struggled to breach the crucial $30,000 mark. This struggle has escalated with a notable 9% decline in the past 30 days, raising concerns about a possible further decline by the year’s end.

The recent legal victory of Grayscale, however, has put the SEC in a position to reconsider its previous denial of converting the Grayscale Bitcoin Trust (GBTC) into an ETF. Although the court ruling doesn’t mandate immediate approval, it does exert pressure on the SEC to revisit its grounds for rejecting Grayscale’s application.

Appeal on the Horizon: SEC’s Options and Market Impact

Interestingly, the SEC might still retain the option to challenge the court’s decision. Despite this uncertainty, the market has witnessed a positive surge in stocks tied to cryptocurrencies post-Grayscale’s win. Notably, Coinbase, entangled in multiple legal battles, recorded a remarkable 14.9% gain, while MicroStrategy rallied by 10.8%. Berenberg’s analysis suggests that the potential inclusion of Coinbase in these ETFs could lead to the SEC modifying its arguments against the ETF applications.

The approval of a spot ETF could wield transformative power over the cryptocurrency landscape by facilitating broader institutional access. This, in turn, could spur increased adoption and potentially draw participation from major industry players, often referred to as the “Big 4” companies. The ongoing regulatory tussle over crypto ETFs highlights the regulatory uncertainties that continue to impact the industry profoundly.

The ultimate question lingers: Does this regulatory back-and-forth pave a smoother path for institutional adoption, or does it further convolute an already intricate landscape? The SEC’s impending decision and its subsequent ramifications on the cryptocurrency sector can only be revealed as time unfolds.