March 27, 2024
Bitcoin News

SEC vs. Grayscale Verdict: Speculation Surrounds Bitcoin Insider Trading

The refusal of the United States Securities and Exchange Commission (SEC) to grant approval for a spot Bitcoin ETF, citing concerns related to market manipulation and money laundering, has drawn criticism. However, a recent decision by the United States Court of Appeals for the D.C. Circuit has the potential to alter this situation.

The court has ruled that the SEC’s reasoning for approving the listing of two Bitcoin futures ETPs while rejecting Grayscale’s proposed spot Bitcoin ETF was insufficiently explained. This ruling may pave the way for other spot Bitcoin ETFs to gain approval from the SEC, potentially leading to a significant influx of institutional capital into the cryptocurrency market.

The SEC’s decision had an immediate impact on Bitcoin prices, causing them to surge. Bitcoin’s price experienced a notable 6% increase, reaching approximately $27,450 during the early London market hours. Interestingly, the average daily trading volume of Bitcoin surged by more than 186% to around $31 billion, according to data aggregated by Binance-backed Coinmarketcap.

Suspicion arises from research conducted by the on-chain intelligence platform Santiment, which suggests that Bitcoin whales and significant investors might have been privy to the SEC vs. Grayscale ruling’s outcome. The study revealed that wallets holding between 10 and 10,000 Bitcoins acquired roughly 14,596 coins shortly before the ruling was announced. This indicates that these substantial investors may have anticipated a favorable ruling and purchased Bitcoin in anticipation of a price surge, which ultimately rewarded them with a swift 6% profit.

While the SEC has not yet made a definitive statement regarding the approval of a spot Bitcoin ETF, the recent court ruling by the United States Court of Appeals enhances the likelihood of such an ETF being approved in the future. This development could mark a significant turning point for the cryptocurrency market, enabling institutional investors to gain exposure to Bitcoin without the need to acquire and secure the underlying cryptocurrency.

Photo by Ivan Babydov

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