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Bitcoin (BTC) approached two-week highs on August 29 following news that digital asset manager Grayscale had won a lawsuit against United States regulators.
BTC/USD 1-day chart. Source: TradingView
SEC was “arbitrary and capricious” in Bitcoin ETF rejection
Data from Cointelegraph Markets Pro and TradingView captured an immediate BTC price reaction to the event, with BTC/USD gaining $1,700 in approximately 30 minutes.
The news reversed a stagnant Bitcoin trading environment that had persisted following sharp losses in mid-August.
A ruling by the United States Court of Appeals for the District of Columbia Circuit determined that the U.S. Securities and Exchange Commission (SEC) was incorrect in rejecting Grayscale’s application to launch an exchange-traded fund (ETF) based on the spot price of Bitcoin.
“The denial of Grayscale’s proposal was arbitrary and capricious because the SEC failed to explain its different treatment of similar products,” an unverified copy circulating online states.
“We therefore grant Grayscale’s petition and vacate the order.”
Grayscale thus joins the queue of firms seeking to launch what would become the first U.S. spot Bitcoin ETF, with the SEC yet to approve any application.
At the time of writing, BTC/USD was trading around $27,300, having reached a high of $27,723 on Bitstamp.
Data from the Binance BTC/USD order book, uploaded to X (formerly Twitter) by monitoring resource Material Indicators, highlighted the uptick. All order classes contributed to buying pressure in a market that lacked liquidity.
BTC/USD order book data for Binance. Source: Material Indicators/X
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“A 6-month view of order book data shows thin liquidity to the upside that should be quite easy to exploit for a retest of the $30s, but we’ve yet to see enough sentiment to do that because the market fears what will happen if #BTC starts printing lower lows,” part of the analysis issued just prior to the Grayscale announcement stated.
Analyst heralds BTC price “bull cycle” catalyst
Continuing the market reaction, Michaël van de Poppe, founder and CEO of trading firm Eight, suggested that the court’s decision could have a positive impact on existing ETF applications, notably that of the world’s largest asset manager, BlackRock.
Related: Bitcoin metric with ‘100% long hit rate’ predicts $23K BTC price floor
“This might sound weird, but we could be on the verge of the start of the bull cycle with this news,” he summarized to X followers in part of a commentary accompanying a dedicated video update.
As Cointelegraph reported, Grayscale’s legal battle with the SEC was lengthy and slow-moving, with CEO Michael Sonnenshein among those insisting that the firm would not rest until granted permission to convert its existing Bitcoin investment vehicle, the Grayscale Bitcoin Trust (GBTC), into an ETF.
“Thank you to everyone who has been on this journey with us, especially our investors,” Sonnenshein wrote on X following news of the SEC’s setback.
“We are grateful for your support and encouragement. Next up: our legal team is actively reviewing the Court’s opinion.”
The GBTC share price rose over 17% at the time of writing on August 29, trading at $20.60.
Grayscale Bitcoin Trust (GBTC) 1-day chart. Source: TradingView
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