In a significant turn of events, Grayscale Investments, a pioneering player in the cryptocurrency investment space, has joined the growing list of institutions vying for the approval of a spot Bitcoin Exchange-Traded Fund (ETF) in the United States. This development follows a recent court-encouraged urging of the U.S. Securities and Exchange Commission (SEC) to revisit its prior decisions.

Market analysts have been quick to highlight the increasing likelihood of the approval of a spot Bitcoin ETF, with Bloomberg experts estimating a substantial 75% chance of approval within the current year. Furthermore, it is being widely anticipated that by the end of 2024, we could witness the introduction of a spot-based ETF product into the market.

One of the key indicators of this groundbreaking shift is the Grayscale Bitcoin Fund (GBTC), which has seen its discount to its net asset value (NAV) narrow down to just 12%, the lowest it has been since December 2021. A noteworthy detail is that GBTC had hit a record low of nearly 50% just last December, marking a significant turnaround from trading at a discount since February 2021. As the world of crypto eagerly awaits a decision from the SEC on the conversion of GBTC into an ETF, it is crucial to recognize that Grayscale currently stands as the largest crypto fund globally, managing a staggering $16.7 billion in Assets Under Management (AUM).

A Grayscale spokesperson confirmed their operational readiness for the conversion, stating, “The Grayscale team remains operationally ready to convert GBTC to an ETF upon the SEC’s approval, and we look forward to sharing more information as soon as practicable.”

The final verdict from the court is expected to be delivered within a week, and it is widely anticipated to echo previous rulings. The SEC has indicated that it does not plan to appeal this decision. In response to these developments, TD Cowen analyst Jaret Seiberg predicts that the Commission may succumb to mounting pressure and finally grant approval for its first spot Bitcoin ETF.

“There will be so much political and legal pressure on the SEC that SEC Chair Gary Gensler has to approve a spot Bitcoin ETF. Cementing its power over Bitcoin ETFs will strengthen the SEC’s push for broader crypto authority once Congress is ready to enact crypto market structure legislation,” Seiberg commented.

Another institution that has shown promise in securing approval for a spot Bitcoin ETF is BlackRock. This financial behemoth boasts an impressive track record, having received approval for 575 out of 576 ETF applications. BlackRock’s decision to reapply for a Bitcoin ETF has inspired others, including Fidelity, to make renewed attempts, despite previous rejections.

In recent days, rumors circulated that BlackRock had already secured approval for its ETF application. However, the company swiftly denied these claims. The mere suggestion of approval triggered a price rally in Bitcoin, briefly pushing it from $27,000 to $30,000 before retracing to $28,419.68. The market experienced a significant liquidation event, with approximately $100 million in positions being closed. CoinGlass data reveals that $81 million worth of short positions were liquidated during the spike to $30,000.

As of the most recent data, Bitcoin has seen a 4% increase in value over the past week, reflecting a neutral market sentiment. In the last 24 hours, the asset has experienced a marginal decline of 0.41%, with a safety score of 59/100.

In conclusion, the cryptocurrency market is standing at the cusp of a significant transformation, with the potential approval of a spot Bitcoin ETF by the SEC. Grayscale’s application and BlackRock’s renewed efforts signal a growing acceptance of cryptocurrencies in the traditional financial landscape. As the court’s ruling approaches, the crypto community, institutional investors, and the broader financial sector are watching with bated breath to witness the outcome that could shape the future of digital assets in the United States and beyond.