Bitcoin, Ether, and other top 10 non-stablecoin cryptocurrencies saw an increase in Wednesday afternoon trading in Asia, as traders celebrated digital asset manager Grayscale’s victory against the U.S. Securities and Exchange Commission (SEC). The market boost followed last week’s largest outflow of digital asset investment products since March amid an unusually low trading volume market. The Forkast 500 NFT Index, however, fell as traders gauged the latest SEC charges against an NFT project operated by media company Impact Theory for breaching securities laws.
Beacon of hope
Bitcoin surged by 5.54%, reaching US$27,434 in 24 hours to 4 p.m. in Hong Kong, bringing its weekly gains to 5.32%, according to CoinMarketCap data. The largest cryptocurrency had traded below US$27,000 since Aug. 18 as macroeconomic developments in the U.S. and China weighed on the crypto market.
Ether, the world’s second biggest cryptocurrency, gained 4.31% to US$1,717 and posted a 4.45% increase for the week. All other top 10 non-stablecoin cryptos rose after a favorable verdict for Grayscale Investments in its ongoing legal dispute with the SEC. The market boost followed last week’s record outflow of digital asset investment products – totaling US$168 million – the largest outflow since the U.S. regulatory crackdown on exchanges in March, according to a report by European cryptocurrency investment firm CoinShares.
“This August’s outflows now total US$278 million in what has been an exceptionally low trading volume market, with investment products trading US$1.3 billion for the week, 16% below the year average. This negative sentiment we believe is due to the increasing acceptance that a spot-based ETF for Bitcoin in the U.S. is likely to take longer than many expect, with recent delays being announced by the SEC,” CoinShares said in an emailed report on Tuesday.
The crypto markets picked up on Wednesday after the District of Columbia Court of Appeals overturned the SEC’s earlier refusal to allow the company’s Grayscale Bitcoin Trust, known by its ticker GBTC, to become an exchange-traded fund (ETF). Grayscale first sued the SEC in June, 2022. The digital asset manager said that the regulator failed to provide clear explanations for the rejection of its ETF application, violating the Administrative Procedure Act. The company added that the SEC’s refusal was inconsistent with its approach to other Bitcoin futures ETF applications.
“The market reaction to Grayscale winning the lawsuit against the SEC shows that the digital asset industry is held back due to a lack of regulatory framework,” Shivam Thakral, chief executive of Indian digital asset exchange BuyUcoin, said in an emailed statement on Wednesday.
“The wave of positive developments has come as a fresh lease of life for the crypto industry which has been battling hostile regulations, dampened investor mood, and crypto winter. We are optimistic that Grayscale getting court approval for Bitcoin ETF will work as a template for similar financial products around the world,” Thakral said.
“Grayscale’s legal victory against the SEC marks a significant shift in digital assets,” Caroline Bowler, chief executive of Australian digital asset exchange BTC Markets, said in an emailed statement on Wednesday.
“It’s important to clarify it is not a ruling in favor of converting its fund into a spot Bitcoin ETF, as some might have anticipated. Instead, the presiding judge granted Grayscale’s petition for review and simultaneously vacated the commission’s order. This development underscores the complexity of regulatory dynamics in the crypto space