As the entire crypto community gets all into celebration mode over the recent Grayscale win against SEC, some experts have voiced their concerns.
Peter Schiff, a name that needs no introduction in the finance industry, is one of those experts. On the social media platform, X, Schiff voiced his concerns regarding the potential consequences of Grayscale Bitcoin Trust (GBTC) transitioning to a spot Exchange Traded Fund (ETF). In his perspective, this development could cast a shadow on Bitcoin’s market dynamics.
Grayscale, a dominant player in the crypto industry, had its aspirations temporarily halted when the U.S. Securities and Exchange Commission (SEC) placed a red flag on its GBTC over-the-counter application.
The SEC’s primary concern? The product didn’t seem equipped to combat “fraudulent and manipulative acts and practices.” Not one to back down, Grayscale took the battle to court, challenging the SEC’s rejection.
A Turnaround in the Courts
August 29 marked a significant shift in the narrative. U.S. Court of Appeals Circuit Judge Neomi Rao turned the tables by sanctioning Grayscale’s plea for a review and nullifying the SEC’s prior dismissal of the GBTC application.
Interestingly, this wasn’t the first time Judge Rao showed skepticism about the SEC’s stance. Earlier, she had pointed out the commission’s lack of clarity on where Grayscale had faltered.
But the journey isn’t over yet. While this is undoubtedly a victory for Grayscale, it doesn’t rubber-stamp the final listing of a Grayscale spot Bitcoin ETF.
Back to Schiff’s take on the matter: Why does he believe GBTC’s transformation into a spot ETF might spell trouble for Bitcoin? Schiff suggests that traders, with the GBTC’s new status, might increase their Bitcoin sales. This surge, he believes, could potentially inflate Bitcoin’s tradable supply in the market.
