Bitcoin prices powered higher Tuesday after a U.S. federal appeals court ruled that the Securities and Exchange Commission was wrong to deny an application for a bitcoin exchange traded fund filed by Grayscale Investments.
The ruling by the U.S. District of Columbia Court of Appeals could allow Grayscale to plough ahead with its effort to introduce a spot bitcoin ETF, which would be the first in the U.S. market, following a series of setbacks linked to its legal battles with the SEC.
The SEC has 45 days to appeal the decision, which could then go either to the U.S. Supreme Court or a so-called 'en banc' review, a legal procedure used when a team of judges handles a case deemed to be extremely complex.
Grayscale has long argued that a spot bitcoin ETF will allow investors to track the price of the world's largest cryptocurrency without having to own it. The SEC has expressed concerns it could be subject to market manipulation, despite the fact that it has approved Grayscale's ETF which tracks bitcoin futures.
The SEC has also rejected similar spot bitcoin ETF applications from Cathie Wood's Ark Investments and Fidelity. BlackRock BRK has also filed for approval of a spot bitcoin ETF with the SEC.
Bitcoin prices were last seen 4.5% higher on the session at $27,274.20 each, extending its six-month gain to around 17.8% but down nearly 60% from the all-time highs it reached in November of 2021.
The Grayscale Bitcoin Trust ETF (GBTC) -) was marked 16% higher at $20.38 each, extending its year-to-date gain to around 150%.
Bitcoin trading volumes, however, have been on a downward spiral since the collapse of FTX, at the time the world's biggest crypto platform, in November of last year.
Data from CryptoQuant published earlier this month showed trading volumes on all exchanges was pegged at 112,317 bitcoin, the lowest since November of 2018.
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