Cryptocurrency prices surged this week after digital asset manager Grayscale Investments scored a major legal win against the Securities and Exchange Commission (SEC).
The U.S. Court of Appeals for the District of Columbia Circuit ruled in favor of Grayscale in its fight to convert its Grayscale Bitcoin Trust into a spot bitcoin exchange-traded fund (ETF). This decision deals a blow to the SEC, which has vigorously opposed the approval of cryptocurrency ETFs.
In the wake of the ruling, Bitcoin jumped above $27,000 for its biggest single-day gain since June. Shares of crypto exchange oinbase">Coinbase and bitcoin mining stocks Marathon Digital and Riot Blockchain also rallied sharply.
The SEC has repeatedly denied applications for spot Bitcoin ETFs, arguing they are prone to manipulation. However, the appeals court found the agency failed to justify treating Grayscale’s proposed product differently than existing bitcoin futures ETFs it has greenlit.
“Grayscale advanced substantial evidence that its proposal was similar to Bitcoin futures ETFs already approved by the SEC,” the opinion stated. “The denial was arbitrary and capricious.”
With this precedent, other asset managers seeking crypto ETF approval like BlackRock and Invesco may now stand a better chance. The ruling signals growing legal momentum against the SEC’s stringent stance on crypto oversight.
Yet the agency remains committed to policing digital assets. This year alone it has charged 17 crypto firms with securities violations amid a broader industry crackdown. The legal status of cryptocurrencies themselves remains disputed, with conflicting recent rulings from U.S. judges.
For now, the appeals court decision represents a high-profile win for the crypto industry as it continues battling the SEC over regulatory authority. And investors are cheering the bullish development.
