Coinbase’s stock price jumped 13% on the day of the Grayscale court ruling. 29 sent Bitcoin prices soaring, but popular crypto exchange Coinbase (COIN) was also a big market winner.Ĭoinbase has been listed as the custodian partner on multiple Bitcoin spot ETF applications, including applications from BlackRock, Fidelity and VanEck. In July, the FOMC raised its fed funds target range by 25 basis points (bps) to between 5.25% and 5.5%, its highest target range in 22 years. Powell also said the Federal Open Market Committee is “prepared to raise rates further if appropriate.” In August, Fed Chair Jerome Powell delivered his annual speech at the Jackson Hole Economic Symposium, and he took the opportunity to reiterate his previous statements that the Fed still has a “long way to go” to bring inflation under control. inflation data has trended steadily lower throughout 2023, inflation levels remain well above the Federal Reserve’s long-term target of 2%. Rising interest rates triggered crypto winter in 2022, producing a wave of industry bankruptcies and sending the prices of most popular cryptocurrencies tumbling. While the Grayscale court victory was a positive catalyst for crypto prices, it was not good enough to get Bitcoin and other cryptocurrencies back into positive territory in August thanks to ongoing concerns about interest rates. Despite its popularity, the GBTC trust only trades over-the-counter in the U.S. Grayscale launched its Bitcoin Trust way back in 2013, and the trust now has more than $17 billion in assets under management. In its most recent Bitcoin spot ETF rejection in March 2023, SEC regulators cited concerns over investor safety and the potential for crypto market manipulation. In its ruling, the court noted the “absence of a coherent explanation” for why the SEC would approve Bitcoin futures ETFs but not Grayscale’s proposed Bitcoin ETF. Up to this point, the SEC has not yet approved a Bitcoin spot ETF backed by cryptocurrency rather than futures contracts. However, the BITO ETF and several other popular Bitcoin ETFs the SEC subsequently approved hold Bitcoin futures contracts rather than the actual cryptocurrency itself.
The SEC approved its first Bitcoin ETF, the ProShares Bitcoin Strategy ETF (BITO), back in October 2021. Experts say the court ruling opens the door for the first generation of Bitcoin spot ETFs to trade on major U.S. Investors cheered the news, sending crypto prices higher across the board. Circuit sided with Grayscale in its lawsuit against the SEC, which had denied Grayscale’s application to convert its popular Grayscale Bitcoin Trust to an ETF. The biggest crypto market story of August came in the last week of the month when The U.S. Following August’s losses, Bitcoin prices remain up 66.6% overall year-to-date, while Ethereum prices are up 44%.
Crypto prices have been resilient overall in 2023 after both Bitcoin and Ethereum each logged their worst annual performance since 2018 last year.
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