By Curtis Dye
Key Insights:
- Bitcoin touches $27,000 post U.S. court’s Grayscale directive.
- Grayscale’s ETF bid could reshape U.S. crypto investments.
- Crypto stocks and altcoins rally, reflecting market optimism.
Bitcoin’s price rose by 5% to reach $27,000 following a directive from a U.S. court for the U.S. Securities and Exchange Commission (SEC) to reevaluate its stance on Grayscale Investments.
At the time of writing, CoinMarketCap indicates Bitcoin’s price stands at $27,904.98, with a trading activity of $26.49 billion in the past 24 hours. The market valuation is pegged at $543.34 billion. 19,470,906 BTC coins are circulating, approaching the overall cap of 21 million BTC coins.
BTC/USD 1-day price chart (Source: CoinMarketCap)
SEC’s Rejection of Grayscale’s ETF Bid Under Scrutiny
Previously, the SEC had expressed reservations about Grayscale’s proposal to transform its Bitcoin Trust, GBTC, into an ETF. However, the recent court directive has reignited discussions around this topic. As a result, GBTC’s valuation climbed by 17%, trimming its net asset value (NAV) discount from 25% to 17%. Observing these shifts, traders speculate on the potential of a full ETF conversion, which could further narrow this discount.
Furthermore, this legal development could be a precursor to introducing a spot bitcoin ETF in the U.S. market. Advocates believe such a product would simplify the process for the general public to invest in Bitcoin, eliminating the complexities of direct cryptocurrency purchases and potential custody provider issues.
Circuit Judge Neomi Rao, from the D.C. Circuit Court of Appeals, emphasized the need for consistency in federal decisions. She drew attention to the SEC’s approval of two bitcoin futures funds while simultaneously rejecting Grayscale’s similar proposal. Rao remarked, “Grayscale’s proposed product aligns closely with the approved bitcoin futures products. Hence, it should have received the nod for NYSE Arca trading.”
Crypto Stocks and Altcoins Reflect Positive Momentum
The stock market, too, mirrors the optimism stemming from this ruling. Crypto-associated stocks, such as Coinbase (COIN) and MicroStrategy (MSTR), recorded gains of 13% and 9%, respectively. Miners, despite past challenges, are charting an upward trajectory. Marathon Digital (MARA) reported a 24% growth, while Riot Platforms (RIOT) and Hut 8 Mining (HUT) both marked a 16% rise.
Additionally, altcoins are registering growth. Ether (ETH), cardano (ADA), dogecoin (DOGE), and Solana (SOL) all marked an approximate 5% increase. CoinGlass data indicates that in the past 24 hours, shorts amounting to $87 million were liquidated, with $76 million occurring in the hour post the announcement.
Ji Kim of the Crypto Council for Innovation observed the market’s swift response: “The immediate reaction in Bitcoin’s price post-ruling highlights the market’s anticipation of the decision’s broader implications.”
The court’s recent directive has stirred discussions and speculations in the crypto sector. It revives Grayscale’s ETF aspirations and underscores the evolving dynamics of cryptocurrencies in the broader financial ecosystem.
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