According to Bloomberg Intelligence, there has been a significant shift in the odds of Grayscale succeeding in its attempt to overturn the SEC’s denial of its $BTC spot ETF bid.
The odds have increased from 60% in favor of the SEC to 70% in favor of Grayscale following oral arguments in court.
Hot off the presses from @NYCStein (with miniscule input from yours truly). Upping Grayscale victory odds to 70%. *But* language of the ruling will be key either way.
If you want to read the entire note it can be found here for Bloomberg Terminal clients:https://t.co/dMLwrBu9d1 pic.twitter.com/mmw3NgfnSR
— James Seyffart (@JSeyff) March 7, 2023
Attention has been given to a series of back-and-forths between judge Neomi Rao and the SEC’s attorney, Emily Praise.
“It seems to me that [what] the Commission really needs to explain is how it understands the relationship between bitcoin futures and the spot price of bitcoin … it seems to me that … one is just essentially derivative. They move together 99.9% of the time. So where’s the gap, in the Commission’s view?” – Judge Rao
In a nutshell, the court had an issue with the SEC claiming that a Bitcoin futures ETF is safer because it’s monitored by the Chicago Mercantile Exchange (CME), despite it being a derivative of the spot price – which the CME bases the future’s contract price on from numerous cryptocurrency exchanges.
Senior Bloomberg Litigation Analyst, Elliott Stein, believes that the court will rule in Grayscale’s favor, but the wording of the ruling will be crucial to whether the conversion can go ahead.
We’ll update this story as more details, and court transcripts are available.