In a recent interview on “Bloomberg Markets,” Grayscale Investments CEO Michael Sonnenshein described the US appeals court’s decision to overturn the Securities and Exchange Commission’s (SEC) block of his firm’s proposed spot Bitcoin exchange-traded fund (ETF) as a “huge win.” The ruling, which has been hailed as a significant step forward for the digital-assets industry, has rekindled hopes for the launch of the first US ETF that would invest directly in Bitcoin.

However, Sonnenshein expressed uncertainty regarding the next steps for Grayscale, stating, “We will have to see upon the final operational procedures that come through that final mandate that the court will issue.” He further added, “We don’t know what the final opinion will say until we reach the end of that period,” referencing the 45-day window for an en banc hearing, which would involve all 17 judges on the court, as opposed to the initial subset panel of three judges

The crypto asset-manager’s recent legal victory is seen as a pivotal moment for the industry. Grayscale has long argued that converting its Bitcoin trust, GBTC, could unlock billions in value for its holders. This win is perceived as monumental, especially given the SEC’s historical reluctance to approve such products.

Despite the optimism, Sonnenshein cautioned that the path forward is not entirely clear. “There really shouldn’t be any further grounds like the SEC has been relying on to continue denying these types of products from coming to market,” he remarked. However, he also noted that Grayscale has not received any communication from the SEC post-ruling.

The market’s reaction was swift. Shares of GBTC surged 17% on Tuesday, outperforming Bitcoin’s 6% gain. However, GBTC’s shares dipped by over 4% on Wednesday, with its discount to its underlying holdings at approximately 18%, according to Bloomberg data. James Seyffart, an analyst at Bloomberg Intelligence, commented on the discount, suggesting that the market is more confident in a conversion now than before, but there remains some skepticism.

But the broader implications of the ruling are still unfolding. Many are keenly observing how the SEC will respond to the six spot Bitcoin ETFs, with decisions due shortly. Notable filers include industry giants like Bitwise, BlackRock, Fidelity, and Invesco. Given the court’s recent decision, there’s heightened interest in the SEC’s rationale for any potential delays.

Sonnenshein, reflecting on the journey, stated, “Yesterday was the culmination of more than a year worth of litigation. Huge win for Grayscale, huge win for our investors and really the crypto and investment communities as a whole.” He also reaffirmed Grayscale’s commitment to the crypto space, emphasizing, “crypto as an asset class is most certainly here to stay.”

The industry now waits with bated breath to see how this landmark ruling will shape the future of Bitcoin spot ETFs in the US. Bloomberg senior ETF analysts, Eric Balchunas and James Seyffart, have now raised the likelihood of a Bitcoin spot ETF to 75% for this year and 95% by the end of 2024, following Grayscale’s triumph. “While we factored Grayscale win into our prev 65% odds, the unanimity & decisiveness of ruling was beyond expectations and leaves SEC w “very little wiggle room,” Blachunas said.

Remarkably, with Grayscale ruling, now it will be fascinating to see how SEC handles the batch of six spot Bitcoin ETFs with a decision due tomorrow, Friday. The list of filers includes Bitwise, BlackRock, Fidelity, Invesco among others. Past SEC delays and denials have hinged solely on grounds the court just shot down completely. So, what will be the reasoning of the SEC now? Or will there be a surprising approval?

At press time, BTC traded at $27,280.

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