On January 12, SEC Chairman Gary Gensler acknowledged the significance of Grayscale's court victory in the approval process for spot Bitcoin Exchange Traded Funds (ETFs). Despite the SEC rejecting similar applications for such products multiple times since 2013, Gensler noted that a court ruling in August 2023 favoring Grayscale changed the SEC's perspective on cryptocurrency investment vehicles. Gensler emphasized the importance of respecting court decisions and suggested that the recent legal developments influenced the SEC's approach to spot Bitcoin ETFs.
While the approval of spot Bitcoin ETFs is a notable development, Gensler clarified that it does not imply an endorsement of Bitcoin itself. He stated, "We don't endorse [Bitcoin]." In June 2022, the SEC had rejected Grayscale's application to convert its Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF, citing concerns that the product did not offer adequate protection against fraudulent and manipulative practices. Grayscale responded by filing a petition for review, leading to a significant victory on August 29, 2023, when the court ruled in favor of Grayscale, deeming the SEC's denial legally unjustified.
This legal victory paved the way for Grayscale, and on January 10, the U.S. Securities and Exchange Commission approved 10 ETFs with Bitcoin as the underlying asset. The first trading day saw substantial activity, with Grayscale's GBTC accounting for nearly half of the total $4.5 billion trading volume, reaching $2.3 billion, according to Yahoo Finance. BlackRock's iShares Bitcoin Trust (IBIT) secured the second position with a trading volume of approximately $1 billion. BlackRock CEO Larry Fink, in an interview on CNBC's Squawk Box, expressed his view that cryptocurrencies are more of an asset class than a currency.
