{"id":28926,"date":"2023-08-30T09:52:43","date_gmt":"2023-08-30T13:52:43","guid":{"rendered":"http:\/\/cryptocornercafe.com\/cafe\/?p=28926"},"modified":"2023-08-30T09:52:43","modified_gmt":"2023-08-30T13:52:43","slug":"renowned-economist-explains-why-grayscales-win-is-not-good-for-bitcoin-price","status":"publish","type":"post","link":"http:\/\/cryptocornercafe.com\/cafe\/2023\/08\/30\/renowned-economist-explains-why-grayscales-win-is-not-good-for-bitcoin-price\/","title":{"rendered":"Renowned Economist Explains Why Grayscale\u2019s Win Is Not Good For Bitcoin Price"},"content":{"rendered":"

One of the major highlights of Grayscale\u2019s victory<\/a> over the US Securities and Exchange Commission (SEC) was its positive effect on Bitcoin\u2019s price. However, renowned economist Peter Schiff has explained why Grayscale\u2019s win may not be good for Bitcoin in the long run.\u00a0<\/p>\n

A GBTC ETF \u2018Bearish\u2019 For Bitcoin<\/h2>\n

Schiff tweeted<\/a> that the GBTC fund becoming a spot ETF (Exchange-traded Fund) is \u201cactually bearish\u201d for the flagship cryptocurrency as he said this move could potentially increase Bitcoin\u2019s \u201ctradable supply.\u201d<\/p>\n

If approved, investors in the GBTC fund will now be able to redeem their Bitcoin, which Schiff has highlighted is bad for Bitcoin\u2019s price and the market as GBTC will have to sell BTC into the market, thereby increasing the tradable supply.\u00a0<\/p>\n

Schiff\u2019s concern probably stems from the fact that GBTC reportedly<\/a> owns over 3% of Bitcoin\u2019s circulating supply, so a sell-off due to redemptions could significantly impact the market, causing Bitcoin\u2019s price to reduce.<\/p>\n

However, other X (formerly Twitter) users quickly pointed out that other ETF applications will likely be approved alongside Grayscale\u2019s application. As such, there will be enough demand to balance out the increase in supply that could result from Grayscale\u2019s redemptions.\u00a0<\/p>\n

Grayscale had applied<\/a> to the SEC to convert its GBTC fund into a Spot Bitcoin ETF. However, the regulator rejected the application, leading Grayscale to file a lawsuit<\/a> against the SEC, stating that the Commission acted arbitrarily and capriciously in its disapproval order.\u00a0<\/p>\n

Following the Appeal court\u2019s ruling in favor of Grayscale, the SEC now has to review the asset manager\u2019s application again with the possibility of an approval higher this time. This is because Grayscale has been able to establish before the court that it should enjoy the same treatment given to Bitcoin Futures ETF which the Commission has had no problem approving.\u00a0<\/p>\n\n

The SEC\u2019s Next Steps<\/h2>\n

Legal expert Jake Chervinsky also chimed in to state<\/a> that the court delivered a \u201chuge embarrassment\u201d for the SEC. As to the next steps that the regulator might take, Chervinsky highlighted four theories.<\/p>\n

Firstly, he believes the SEC could just pick another reason to deny Grayscale\u2019s proposal, which could lead to another long-running legal battle between both parties. Apparently, the court had ruled that the Commission didn\u2019t provide sufficient reason to deny Grayscale\u2019s application as it faulted the \u201csignificant market\u201d test size as wrong.\u00a0<\/p>\n

His second theory is that the SEC will choose to abide by the court\u2019s decision and use that as an excuse to drop its \u201canti-ETF position.\u201d\u00a0<\/p>\n

Furthermore, the legal expert noted that the SEC may have no choice but to approve the pending ETF applications as there is \u201cpolitical pressure\u201d on the SEC. According to him, the world\u2019s largest asset manager, BlackRock, and its CEO, Larry Fink, are lobbying for their application to be approved.\u00a0\u00a0<\/p>\n

Lastly, Chervinsky believes that the SEC\u2019s Chair Gary Gensler could use this to spin the anti-crypto narrative<\/a> by approving these ETFs to show that the Commission is willing to approve products that abode by their regulations.\u00a0<\/p>","protected":false},"excerpt":{"rendered":"

<\/p>\n

One of the major highlights of Grayscale\u2019s victory<\/a> over the US Securities and Exchange Commission (SEC) was its positive effect on Bitcoin\u2019s price. However, renowned economist Peter Schiff has explained why Grayscale\u2019s win may not be good for Bitcoin in the long run.\u00a0<\/p>\n

A GBTC ETF \u2018Bearish\u2019 For Bitcoin<\/h2>\n

Schiff tweeted<\/a> that the GBTC fund becoming a spot ETF (Exchange-traded Fund) is \u201cactually bearish\u201d for the flagship cryptocurrency as he said this move could potentially increase Bitcoin\u2019s \u201ctradable supply.\u201d<\/p>\n

If approved, investors in the GBTC fund will now be able to redeem their Bitcoin, which Schiff has highlighted is bad for Bitcoin\u2019s price and the market as GBTC will have to sell BTC into the market, thereby increasing the tradable supply.\u00a0<\/p>\n

Schiff\u2019s concern probably stems from the fact that GBTC reportedly<\/a> owns over 3% of Bitcoin\u2019s circulating supply, so a sell-off due to redemptions could significantly impact the market, causing Bitcoin\u2019s price to reduce.<\/p>\n

However, other X (formerly Twitter) users quickly pointed out that other ETF applications will likely be approved alongside Grayscale\u2019s application. As such, there will be enough demand to balance out the increase in supply that could result from Grayscale\u2019s redemptions.\u00a0<\/p>\n

Grayscale had applied<\/a> to the SEC to convert its GBTC fund into a Spot Bitcoin ETF. However, the regulator rejected the application, leading Grayscale to file a lawsuit<\/a> against the SEC, stating that the Commission acted arbitrarily and capriciously in its disapproval order.\u00a0<\/p>\n

Following the Appeal court\u2019s ruling in favor of Grayscale, the SEC now has to review the asset manager\u2019s application again with the possibility of an approval higher this time. This is because Grayscale has been able to establish before the court that it should enjoy the same treatment given to Bitcoin Futures ETF which the Commission has had no problem approving.\u00a0<\/p>\n

The SEC\u2019s Next Steps<\/h2>\n

Legal expert Jake Chervinsky also chimed in to state<\/a> that the court delivered a \u201chuge embarrassment\u201d for the SEC. As to the next steps that the regulator might take, Chervinsky highlighted four theories.<\/p>\n

Firstly, he believes the SEC could just pick another reason to deny Grayscale\u2019s proposal, which could lead to another long-running legal battle between both parties. Apparently, the court had ruled that the Commission didn\u2019t provide sufficient reason to deny Grayscale\u2019s application as it faulted the \u201csignificant market\u201d test size as wrong.\u00a0<\/p>\n

His second theory is that the SEC will choose to abide by the court\u2019s decision and use that as an excuse to drop its \u201canti-ETF position.\u201d\u00a0<\/p>\n

Furthermore, the legal expert noted that the SEC may have no choice but to approve the pending ETF applications as there is \u201cpolitical pressure\u201d on the SEC. According to him, the world\u2019s largest asset manager, BlackRock, and its CEO, Larry Fink, are lobbying for their application to be approved.\u00a0\u00a0<\/p>\n

Lastly, Chervinsky believes that the SEC\u2019s Chair Gary Gensler could use this to spin the anti-crypto narrative<\/a> by approving these ETFs to show that the Commission is willing to approve products that abode by their regulations.\u00a0<\/p>\n

<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"colormag_page_layout":"default_layout","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[82],"tags":[],"class_list":["post-28926","post","type-post","status-publish","format-standard","hentry","category-blockchain"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/posts\/28926","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/comments?post=28926"}],"version-history":[{"count":0,"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/posts\/28926\/revisions"}],"wp:attachment":[{"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/media?parent=28926"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/categories?post=28926"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/tags?post=28926"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}