James Seyffart, an ETF Research Analyst at Bloomberg Intelligence, shared his insights on the ongoing lawsuit between Grayscale Investments and the U.S. Securities and Exchange Commission (SEC).
Seyffart believes that even if Grayscale wins the lawsuit, it may not guarantee the firm’s ability to issue spot Bitcoin exchange-traded funds (ETFs) by converting its existing Grayscale Bitcoin Trust (GBTC) shares.
Subheading 1: Seyffart’s Analysis and High Likelihood of SEC Losing Lawsuit
During a podcast hosted by What Bitcoin Did, James Seyffart, a Bloomberg analyst, discussed the legal battle between Grayscale Investments and the SEC. Seyffart predicted a high likelihood of the SEC losing the lawsuit, aligning with a previous Bloomberg memo he contributed to. The memo, authored by Bloomberg’s Senior Litigation Analyst Elliot Stein, anticipated that the court would likely vacate the SEC’s rejection of Grayscale’s spot BTC ETF application.
Subheading 2: Bloomberg Intelligence’s Perspective and Expected Ruling
Bloomberg Intelligence estimates that Grayscale has a 70% chance of winning the lawsuit. A ruling is anticipated in the second or third quarter of 2023. However, the language used in the ruling will determine whether the court allows the SEC to reject the ETF application on different grounds or compels them to accept it.
Subheading 3: Potential Challenges Even with a Favorable Outcome
James Seyffart highlighted that even if Grayscale wins the case, the SEC could still deny the conversion to an ETF on other grounds. Winning the lawsuit does not guarantee a seamless transition to an ETF for Grayscale.
Subheading 4: Grayscale CEO’s Timeline Expectations
In an earlier podcast appearance on What Bitcoin Did, Grayscale CEO Michael Sonnenshein stated that he anticipated a verdict in the fall of 2023, between the second and third quarters.