Grayscale’s legal head says bitcoin spot ETF approval is a “matter of when, not if”


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After the D.C. Circuit Court of Appeals ruled in favor of digital asset management firm Grayscale in a lawsuit against the U.S. Securities and Exchange Commission (SEC) in regards to a bitcoin spot exchange traded fund (ETF), the firm’s chief legal officer Craig Salm expects the regulator to approve the ETF.

“It’s a matter of when, not a matter of if,” bitcoin spot ETFs will be approved in the U.S., Salm told me on TechCrunch’s Chain Reaction podcast.

The new verdict was in response to Grayscale’s lawsuit against the SEC, which denied the firm’s application to convert its Grayscale Bitcoin Trust (GBTC) into an ETF on June 29, 2022. The court ruled 3-0 in favor of Grayscale, which currently owns 3.4% of outstanding bitcoin “worth tens of billions of dollars,” according to the legal filing.

“[The ruling] is a huge win for us, our shareholders and really the whole crypto community. Right now, we’re focused on finishing those final steps to get this conversion to happen,” Salm said. “I don’t think we should wait any longer to let that happen, especially now that we have this paving of the road to an ETF conversion.”

The exact timeline is difficult to predict, as the ruling is subject to a 45-day review period, Salm noted. But if there’s no “rehearing,” then it will be smooth sailing for the company. Bloomberg ETF analysts increased their odds from 65% to 75% that the SEC will approve a bitcoin spot ETF this year, and are betting on odds of 95% by end of 2024.

“My view is that this should happen as soon as possible because we have investors today. GBTC represents nearly a million investors across all 50 states,” Salm said. “But because the product is not an ETF today, it is trading at a discount.”

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