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Mooners & Shakers: Big L for Gensler as crypto market surges on Grayscale Bitcoin ETF ruling

A US federal court ruling has sent the spirits of Bitcoin – and the crypto world – soaring, with the SEC’s war on BTC ETFs taking a hammer blow.

Rob Badman
5 min read
August 30, 2023 - 2:06PM
Stockhead
This one's for you Gazza Gensler, and all your crypto-hating mates. Picture: Getty Images
This one's for you Gazza Gensler, and all your crypto-hating mates. Picture: Getty Images

Bears are growling, macroeconomic headwinds are swirling and there’s been talk of another big dip coming. But hang on, a new twist.

A US federal judge just did Grayscale, and potentially all of crypto, a solid.

Let’s very obviously start with that, because it sent Bitcoin pumping roughly $US2,000 from barely $US26,000 to $US28,000. It’s settled back a shade under that for the moment as it regathers its thoughts.

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Here, see if you can spot when all the excitement went down late last night (AEST).

It's a pretty, pretty picture for Bitcoin. Source: CoinGecko
It's a pretty, pretty picture for Bitcoin. Source: CoinGecko

So what happened? And what’s Grayscale again?

Grayscale is a major Bitcoin and crypto asset manager – actually, the biggest 100 per cent crypto-focused asset manager in the space.

At great expense, and risk, it’s been fighting a legal battle with the US Securities and Exchange Commission (SEC) helmed by Gary “The Gunslinger” Gensler in order to get its over-the-counter GBTC (Grayscale Bitcoin Trust) product converted into a listed Bitcoin ETF.

A spot Bitcoin ETF is seen as the holy grail for institutional investment into Bitcoin and crypto in the US, and some huge players, including BlackRock, VanEck, and ARK Invest are gunning to get their applications approved.

Until now, the SEC had successfully roadblocked Grayscale’s attempts, but overnight, a US Court of Appeals circuit judge, Neomi Rao, ordered that Grayscale’s petition for review be granted and for the SEC’s order to deny the GBTC listing application to be vacated.

This. Could. Be. Huge.

The American Bloomberg crowd is certainly getting frothy about it …

Here’s a take from Tim Bevan, CEO at the crypto exchange-traded product provider ETC Group, whose people got in touch with Stockhead on Wednesday morning with the following:

“Despite the inevitable SEC appeal, to our mind there is no doubt now, spot BTC ETFs are coming to the US.

“We don’t believe the SEC will act as kingmaker and the most likely outcome is a block approval of applications that meet requirements, probably in Q1 2024.

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“The level of pent up institutional and retail demand in the US is significant and we expect this to have a positive impact on the price of Bitcoin as can be seen from today’s price reaction, as well as further accelerate the global trend towards acknowledging crypto as a new asset class.”

Liking it, liking it.

This is a major blow in Emperor (or, as more formally known, Senator) Elizabeth Warren and Darth Gensler’s Anti-Crypto War. An appeal from the SEC is indeed inevitable, though, and here’s a take or two on what it could do next …

“But the court didn’t order the SEC to approve Grayscale’s ETF proposal. It just said the SEC’s analysis on the ‘fraud and manipulation’ issue was wrong,” notes Jake Chervinsky – an American lawyer focused on blockchain, crypto and DeFi.

“Now, the SEC has to go back and review Grayscale’s proposal again, with the court’s ruling in mind,” he said.

“What will the SEC do?

“One theory is that the SEC will just pick a different reason to deny Grayscale’s proposal and force more long and costly litigation. That’s possible. It’s hard to understate the extreme hostility of SEC leadership toward crypto. Will Chair Gensler really accept this loss?”

On that last point there … it all seems to be falling very neatly in place for BlackRock’s BTC ETF plans, doesn’t it. What Larry Fink wants, Fink gets?

But what about those bears?

We mentioned the bearish sentiment swirling at the top of this article.

As much as we hate to throw a wet blanket over proceedings, let’s just check in on that side of the ledger for a sec.

Here’s another Bloomberg view – senior macro strategist Mike McGlone, who has certainly recently flipped from the positive Bitcoin outlook tune he was playing last year and even earlier this year even. His Bitcoin teenager analogy isn’t bad, though.

Also of note in the Negative Nellie corner, we have a widely followed trader and pseudonymous analyst who goes by the name Cantering Clark, who isn’t particularly confident we’re going to see another crypto bull run at all.

“Last bear market people thought it was over. This time everyone just comfortably leans on the idea of ‘next bull market’,” he wrote in an X post to his 181,600-odd followers.

“I was very confident last time, less confident in the market now.

“More confident in some kind of limited survivors integration with TradFi.”

“Constant future promises, plenty of scams, and no real-world application beyond stables and the Swiss-Bank’esq of BTC,” he added.

“Not to mention the things that actually are transformative for the global financial system don’t actually require tokens to come to fruition.”

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Top 10 overview

With the overall crypto market cap at $US1.14 trillion at noon Wednesday (AEST), up 4.1 per cent since the same time Tuesday, here’s the state of play among top 10 tokens – according to CoinGecko.

Source: CoinGecko
Source: CoinGecko

It’s a green scene across the crypto majors board. Thanks, Federal Court Judge Neomi Rao.

Top gainers in the top 100 

There’s not much slumping in the top 100 cryptos by market cap at the time of writing, so here are some of the biggest 24-hour gainers at noon Wednesday (AEST). Stats based on CoinGecko.com data.

PUMPERS (11-100 market cap position)

  • Stacks (STX), (market cap: $US759 million) +19.7 per cent
  • Bitcoin Cash (BCH), (market cap: $US4.33 billion) +16.1 per cent
  • Toncoin (TON), (market cap: $US5.83 billion) +12 per cent
  • XDC Network (XDC), (market cap: $US8661 million) +9.95 per cent
  • THORChain (RUNE), (market cap: $US477 million) +8.2 per cent
  • Bitcoin SV (BSV), (market cap: $US640 million) +7.8 per cent
  • eCash (XEC), (market cap: $US495 million) +6.6 per cent
  • Fantom (FTM), (market cap: $US603 million) +6.1 per cent
  • Lido DAO (LDO), (market cap: $US1.48 billion) +5.9 per cent
  • Wrapped Bitcoin (WBTC), (market cap: $US4.49 billion) +5.4 per cent

But there are a few which haven’t done as well.

SLUMPERS (11-100 market cap position)

  • Curve DAO (CRV), (market cap: $US413 million) -3.1 per cent
  • Casper Network (CSPR), (market cap: $US414 million) -2.4 per cent
  • Sui (SUI), (market cap: $US384 million) – 2 per cent
  • Frax Share (FXS), (market cap: $428 million) -1.5 per cent
  • Synthetix Network (SNX), (market cap: $US664 million) -1 per cent

Around the blocks

Some pertinence and randomness that stuck with us on our morning moves through the Crypto Twitterverse.

Meanwhile, here’s a song about Gary Genlser’s latest loss, although someone thinks it’s all a “top signal” and time to “gtfo”. Sheesh, some people just can’t ever enjoy half decent news, can they.

This content first appeared on stockhead.com.au

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Originally published as Mooners & Shakers: Big L for Gensler as crypto market surges on Grayscale Bitcoin ETF ruling

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Original URL: https://www.heraldsun.com.au/business/stockhead/mooners-shakers-big-l-for-gensler-as-crypto-market-surges-on-grayscale-bitcoin-etf-ruling/news-story/00a761f5f13db5d56f31eaca043cdaf3