Spot Bitcoin ETF Future Remains Uncertain After Court Win

Spot Bitcoin ETF Future Remains Uncertain After Court Win

Long-awaited investment vehicle faces possible SEC appeal of court ruling, other hurdles.

Finance Reporter
Reviewed by: Lisa Barr
Edited by: Lisa Barr

While investors declared victory after a federal court backed Grayscale in its effort to offer a spot bitcoin ETF, much remains unclear about how Grayscale Investments and other investment firms will roll out the product and if they will be able to do so at all. 

A ruling issued Tuesday by the U.S. Court of Appeals for the D.C. Circuit means the SEC must review Grayscale’s application to convert its $15 billion Grayscale Bitcoin Trust (GBTC) into an ETF.  

The SEC rejected the application last year, and Grayscale sued the agency to force it to reconsider. A slew of firms, including BlackRock Inc. and Bitwise Asset Management, have been vying to launch an ETF that tracks physically backed bitcoin as opposed to ETFs that track bitcoin futures, which the SEC does allow.  

Yet while the ruling was a watershed moment for those pushing to integrate bitcoin into traditional finance, many questions remain unanswered about how and when a “spotcoin” ETF will actually hit the market. The SEC has 45 days to appeal the court’s decision, either in the U.S. Court of Appeals for the D.C. Circuit or in the Supreme Court. 

In a statement on Tuesday, Grayscale said it was reviewing the next steps. The SEC said in a statement it is also reviewing the court’s decision.  

Spot Bitcoin ETFs’ Odds Updated 

While Grayscale won the lawsuit, it doesn’t mean the firm will be first in line for approval if the agency approves a spot bitcoin ETF. Grayscale may have to refile with the SEC now.  

Grayscale CEO Michael Sonnenshein told Bloomberg TV on Wednesday the firm “won’t know what the final opinion will say” until the end of the 45-day appeal period. He added the firm won’t know “operational procedures” such as whether it will need to refile its application.  

Bloomberg analysts updated their odds of a spot bitcoin approval in 2023 to 75% from 65% in light of the court’s decision. “You take the legal loss and the PR loss, and we think this is going to create the political untenableness of denial, and so that's why we're pretty confident that they'll launch,” said ETF analyst Eric Balchunas in an online Bloomberg roundtable.  

Morningstar ETF analyst Bryan Armour said the SEC could revoke its approvals of bitcoin futures ETFs as a last-resort tactic to block spot bitcoin ETFs coming to market. In the court’s decision to back Grayscale, judges argued that the SEC was unjustified in blocking a spot bitcoin ETF because the SEC has approved bitcoin futures ETFs.  


Contact Lucy Brewster at [email protected]  

Lucy Brewster is a finance reporter at covering asset managers, emerging technologies, and regulation. She hosts webinars and appears on Exchange Traded Fridays,’s flagship podcast. She previously was a finance fellow at Fortune Magazine where she covered markets, investment strategy, and venture capital. She has also been a freelancer writer at the publication Mergers & Acquisitions and a research fellow at the Historic Hudson Valley. 

She graduated from Vassar College in 2022 with a degree in History and was an editor of The Miscellany News, the college's award winning student run newspaper. 

Lucy lives in Brooklyn, NY, and in her free time she loves to run and find new recipes to cook.