Crypto investors celebrate SEC victory over Grayscale

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Crypto investors celebrate SEC victory over Grayscale

The SEC's legal victory over Grayscale, an asset manager holding 3.4% of all Bitcoin in circulation, has been a welcome development for Crypto investors.

A U.S. court ruled that the Securities and Exchange Commission did not fully explain its rejection of Grayscale's application for an exchange-traded product.

In a short period of time, BTC surged nearly 7%, and the cryptocurrency market capitalization surpassed $15B in a matter of hours. Almost all top-100 digital assets have surged after the ruling became public.

The SEC's tenuous relationship with the cryptocurrency sector has reached a fever pitch this year after the agency filed high-profile lawsuits against major exchanges such as Coinbase and Binance.

A win for Grayscale, which has seen a resurgence as its flagship product, GBTC, has floundered, is welcome news for crypto investors.

With more than $16 billion in assets under management, GBTC is up 18% today and has outperformed Bitcoin this year.

The sector's legal battles with the SEC, a victory for Ripple, the company that issues the XRP cross-border payment token, have sent markets soaring in July.

To be sure, the Grayscale ruling doesn't mean that the SEC will approve the firm's application, said Jake Chervinsky, one of crypto's most prominent lawyers. Chervinsky did suggest that the ruling would enable the SEC to pivot away from its anti-spot ETP stance.

The SEC contends that Grayscale's product is not designed to prevent fraud and manipulation. Chervinsky said the agency has been using this angle for years.