Dear clients,
Bitcoin’s gains from a U.S. court ruling bolstering the future prospects of funds targeting retail investors saved the cryptocurrency from a disappointing month and instilled renewed optimism about its long-term prospects.
The Securities and Exchange Commission’s rejection of Grayscale Investments‘ proposal was „arbitrary and prejudicial“, a federal court said Tuesday, giving the crypto asset manager a landmark victory.
The cryptocurrency surged more than 7% on the news, setting the course for its best day since March and cutting some of the heavy losses suffered over the summer.
Plagued by lower demand for risky assets caused by rising U.S. Treasury yields and a drop in volatility during quiet summer trading, bitcoin was on track for its worst month since November 2022 before the ruling, when confusion reigned following the liquidation of the FTX exchange. Its monthly losses are now around 5%.
Investors said Grayscale’s victory will likely now factor into future SEC rulings on spot bitcoin fund ETFs filed by several major financial firms this year, including the world’s largest asset manager BlackRock.
The emergence of spot bitcoin ETFs could help the cryptocurrency industry tap into a large amount of previously untapped funds from retail investors, which in turn would help boost the bitcoin price.
