Grayscale Victory Aligning with Increase in Global Liquidity

Aug 31, 2023 • 8 Min Read

Grayscale Victory

As recently discussed, we’ve been awaiting either short-term relief in liquidity conditions—indicated by falling interest rates, a declining DXY, and increasing central bank liquidity—or the realization of crypto-specific catalysts for better price action. This week, we received encouraging news on both fronts.

The courts have ruled that the SEC acted in an arbitrary and capricious manner when denying the spot Bitcoin ETF.

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In the wake of this news, cryptoassets, trusts, and crypto equities experienced a strong rally on Tuesday. This development will likely pave the way for a Bitcoin ETF to enter the market and could lead to the conversion of existing trusts into ETF products. The discounts to NAV on GBTC and ETHE both shrank substantially following the announcement.

The chart in this report is only accessible to members
The chart in this report is only accessible to members

It's crucial to note that this ruling does not automatically greenlight a Bitcoin ETF. Instead, it invalidates the SEC's initial reasons for rejecting Grayscale's application for a spot Bitcoin ETF. Now, the SEC is mandated to reevaluate Grayscale's application. From what we currently gather, they have four options:

Identify another rationale for denying the spot Bitcoin ETFs Appeal ...

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