Bitcoin is back.
The crypto community has been nothing short of a disaster over the past year, from the face of the industry getting arrested to high-profile bankruptcies.
But Tuesday marked a massive win for the space: Grayscale won a court case against the SEC over its rejection of the asset manager's application to convert its bitcoin trust into an ETF.
The news sent various corners of the crypto community surging, including bitcoin, ether, and Coinbase, Insider's Matthew Fox writes.
The excitement stems from the belief the door is now open for multiple bitcoin ETFs to get approved. Financial giants BlackRock and Fidelity are among those that have already filed bitcoin ETF applications.
The impact of an ETF on the price of bitcoin can't be overstated. In July, investment research firm Fundstrat predicted a BlackRock ETF could help drive bitcoin as high as $180,000 by April 2024.
But why would a bitcoin ETF be rocket fuel for the entire market?
The most obvious answer is that it enables more people to invest in crypto. A bitcoin ETF, especially one managed by household names like BlackRock or Fidelity, might be a more palatable investment for people who have traditionally steered clear of crypto.
Of course, what's good for crypto might not be good for crypto companies. Big players like BlackRock and Fidelity, if only due to their sheer size, are bound to suck up plenty of market share with their bitcoin ETFs. That could limit smaller, more crypto-centric players' growth potential.
To be fair, certain crypto-focused companies are bound to do well from the decision. Coinbase, for example, was listed as the custodian on BlackRock's bitcoin ETF application.
More broadly, the court decision could serve as a reality check for the SEC and its chair, Gary Gensler. The regulator has been aggressive in its oversight of the crypto community, going as far as filing lawsuits against some of its biggest players. But a public defeat could lead it to change in its approach.
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