SEC vs. Grayscale Verdict: Was Bitcoin Insider Trading at Play?

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The United States Securities and Exchange Commission (SEC) has been criticized for its refusal to approve a spot Bitcoin ETF, citing concerns about market manipulation and money laundering. However, a recent ruling by the United States Court of Appeals for the D.C. Circuit could change that.

The court ruled that the SEC failed to adequately explain why it approved the listing of two Bitcoin futures ETPs but rejected the Grayscale’s proposed spot Bitcoin ETF. This ruling could open the door for other spot Bitcoin ETFs to be approved by the SEC, which could lead to a flood of institutional money into the crypto market.

Bitcoin Prices Spike

The SEC ruling sent Bitcoin prices soaring. The price of Bitcoin jumped over 6% to trade around $27,450 during the early London market on Wednesday. Interestingly, Bitcoin’s average daily traded volume spiked over 186% to about $31 billion, according to aggregate data provided through Binance-backed Coinmarketcap.

Read More: BTC Price Analysis: With Green Light For Grayscale, Will Bitcoin Price Reach $30K?

Something Smells Fishy

Research conducted by the on-chain intelligence platform Santiment suggests that Bitcoin whales and sharks may have known the outcome of the SEC vs. Grayscale ruling. The study found that wallets holding between 10 and 10,000 Bitcoins added about 14,596 coins just before the ruling was delivered. This suggests that these large investors may have been anticipating the ruling and were buying Bitcoin in anticipation of a price increase. As a result, the Bitcoin whales and sharks were rewarded with a quick 6 percent gain.

Read More: Peter Schiff: Grayscale’s Bitcoin Spot ETF is Bearish for Bitcoin – Here’s Why

The SEC has not yet said whether it will approve a spot Bitcoin ETF. However, the recent ruling by the United States Court of Appeals makes it more likely that the SEC will approve such an ETF in the future. This could be a major turning point for the cryptocurrency market, as it would allow institutional investors to gain exposure to Bitcoin without having to buy and store the underlying cryptocurrency.