With a US court ruling, cryptocurrencies turn the corner
A US appeal court’s decision to uphold Grayscale Investments’ lawsuit against the Securities and Exchange Commission (SEC) after it denied the company’s application to convert the Grayscale Bitcoin Trust to an exchange-traded fund (ETF) paves the way for the creation of bitcoin ETFs, a milestone in the evolution of cryptocurrencies as the money of the future. It’s also prompted a surge in crypto trading.
Grayscale Investments set up a bitcoin ETF in 2015, but withdrew it after warnings from the SEC. Now, the Washington D.C. circuit U.S. Appeals Court ruling means that bitcoin ETFs could soon be traded through a traditional stock exchange. That said, it is considered highly unlikely that the SEC will appeal to the Supreme Court.
How important are ETFs in the cryptocurrency environment? Very important, because the fact that an investment fund offers them to its clients means that those clients can invest in cryptocurrencies through the investment fund’s management company. In practice, this is a major endorsement of cryptocurrencies: if a major investment fund sets up a bitcoin ETF in bitcoins or ether and offers it to its clients, those investors will have greater confidence in what is still regarded as a volatile financial product.
