The recent victory of Grayscale against the SEC is significant and offers a new perspective on where the market is headed. 

However, it's essential to recognise that we've only turned another chapter in a book - this is far from over.

While Tuesday's ruling has brought attention to Bitcoin Spot ETFs, it is not the final verdict.

Today, we unpack what this win means for Bitcoin, discuss future possibilities and guide you on how to position your portfolio for the future.

Let's dive in.

TLDR 📃

• Grayscale's recent legal victory against the SEC is significant for Bitcoin and the entire crypto industry.
• The judge's ruling supports Grayscale's arguments and dismantles the SEC's concerns about market manipulation and other risks.
• The victory, however,  does not guarantee immediate Bitcoin Spot ETF approval.
• The timeline for Bitcoin Spot ETF approval remains uncertain. Late 2023 is possible, but 2024 isn’t farfetched.
• Two Bitcoin price scenarios in 2023: bullish run to $40,000 with the approval of a spot ETF or stagnation around $25,150 without it.

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Disclaimer: Not financial or investment advice. Any capital-related decisions you make are your full responsibility.

What does the win mean for Grayscale? 👨‍⚖️

Alright, let's get real about what this victory means for Grayscale—no fancy jargon – just a straight-up look at what's cooking. Need a refresher? No problem, we’ve got you covered.

What was the lawsuit all about? 

Grayscale currently holds a significant $17.4 billion in Bitcoin through its Grayscale Bitcoin Trust. But here's the kicker: investors holding those trust shares couldn't trade them for actual Bitcoins. Nope, they were stuck with trust shares, watching from the sidelines.

Grayscale intends to convert the Bitcoin Trust into a Bitcoin Spot ETF -- a shift that would give its investors direct access to Bitcoin.

Here's where it gets interesting. The SEC kept blocking Grayscale's ETF dreams, raising concerns about market manipulation and associated risks.

But Grayscale didn't back down. They took the SEC to task, legally, of course. The whole goal of the lawsuit was to seek a legal review to determine whether the SEC’s reasons were substantial enough to prevent a Bitcoin ETF.

The outcome of the lawsuit & its implications 

Fast forward to today - more than a year after Grayscale initially announced its intent to sue the SEC. We finally have the definitive answer regarding whether the SEC's argument held water. As it turns out, the judge sided with Grayscale.

Let’s try translating the judge's comments from legal jargon into more relatable language. The judge essentially said that the SEC’s reasoning on how a Bitcoin Spot ETF could be manipulated is inconsistent, incoherent, and essentially hogwash.

That is a massive victory for Grayscale and puts the SEC in a tough spot because all the arguments they have previously used to deny a Bitcoin Spot ETF have now fallen flat. So, the question now is: where do we go from here?

What could happen next? ⌛

Here’s the thing. While this decision is a big win for Grayscale and the entire crypto industry -- it does not mean that a Bitcoin Spot ETF is a done deal. The SEC still could have some tricks up their sleeves. So, here's a rundown of what could happen now.

The SEC has three options from here; we categorised them as most likely, unusual but possible, and very unlikely.

• Most likely, The SEC will approve the conversion of the Bitcoin Grayscale Trust to a Spot ETF. There’s a 70% chance that the SEC would take this path.
• Unusual, but possible: The SEC chooses to fight back. It may provide new reasons for denying the application. This move likely leads to a confrontation. It is an unusual move but possible nonetheless. We’ve assigned a 25% chance to this scenario.
• Very unlikely: The SEC takes an unconventional approach to reinforce its stance. For instance, it could revoke the listing of Bitcoin Futures ETFs. This move would make its position on Bitcoin Spot ETFs more consistent. We gave this path a 5% chance; it is highly unlikely but not entirely impossible.

What action will the SEC take? Well, it has a deadline of either 45 or 60 days to appeal against the judge's decision. We will know by then whether it plans to fight back or has accepted defeat. So, while a Bitcoin Spot ETF is not a done deal yet, the odds are in our favour. 

What is, however, harder to estimate is the timeline👇

The timeline for approval ✅

A key point to understand is that the outcome of the lawsuit isn’t a win for Grayscale's ETF application alone. It is significant for all Spot Bitcoin ETF applications. The SEC has used the same arguments to deny the applications from all other ETF providers. 

Interestingly, this year has seen a massive influx of ETF providers, with industry giants like BlackRock now applying for a Spot Bitcoin ETF.

This large volume of interest in Bitcoin Spot ETFs makes it challenging to estimate the approval timeline for a Spot Bitcoin ETF. For instance, the next decision on a Spot Bitcoin ETF is already scheduled for September 2nd -- the SEC has less than two days to decide whether to approve, deny, or postpone its ruling on BlackRock’s Spot ETF. 

From our perspective, a more plausible timeline would involve the SEC simultaneously approving multiple ETFs, likely around October or November 2023. 

Of course, this all depends on the SEC, and there’s no way to predict what they’ll do with certainty. But we know that they must formulate a response, and if they choose to challenge the court ruling, it could extend the timeline to 2024. However, we can say with certainty that we've never been closer to the launch of a Bitcoin Spot ETF than we are now.

So, if Bitcoin Spot ETFs are approved, what would it mean for Bitcoimn’s prices? 

Well, here is your answer 👇

What it means to the price of Bitcoin 📈

The market recently saw a bullish reversal after Grayscale won against the SEC. Put simply, this event was the catalyst for what's about to happen now.

We expect BTC to reach the $28,750 - $32,000 region again in the coming weeks. 

However, a question remains… What happens after that? We've come up with two potential scenarios for the rest of 2023, taking into consideration both technicals and fundamentals:

Scenario 1 - The triumph of the bull 🐂

Following recent events, Bitcoin's trajectory is now set for the $28,750 - $32,000 region. Grayscale winning against the SEC is a major catalyst that gave a "green light" to spot BTC ETFs to make their way into the US. 

If we had to make an educated guess, we'd say that a spot Bitcoin ETF will be approved sometime in November. The arrival of these ETFs will trigger a major rally that will push BTC's price to $40,000 at some point in late 2023 - early 2024.

Scenario 2 - The snail's race 🐌

Assuming the Bitcoin ETF approval is put on stand-by/isn't approved at all, the rest of 2023 will likely be stagnant.

We will surely reach the $28,750 - $32,000 region, but there will not be enough fuel to push us above it. As a result, the price of Bitcoin will return to $25,150.

Considering this scenario, we'll likely see another major dump to the low $20,000s before the market starts pumping again, with Bitcoin approaching its halving in April 2024.

Our convictions are based on the ETF's approval, and following Grayscale's win, we'd say the first scenario is the most likely.

Cryptonary's take 🧠

As you can see, the situation isn't black and white. There are still many ways the plot could unfold. From our perspective, our aim here isn't necessarily to predict every move but to be prepared to respond and ensure the odds are in our favour.

At present, the odds favour the approval of a Spot Bitcoin ETF. However, this doesn't mean you should remain idle and wait. It's crucial to follow the news closely. 

We recommend joining the Telegram channel Zoomer News' to receive news faster than others when a Bitcoin Spot ETF is announced or potentially negative news surfaces.

In addition, the price movement that BTC exhibited upon the news of Grayscale is highly indicative of what could occur upon announcing a Bitcoin Spot ETF approval. Therefore, focusing on tokens that demonstrated strength during BTC's movement following the news is crucial. 

On the other hand, you should know why certain tokens didn't exhibit strength and instead showed weakness in response to the news of Grayscale’s win. 

Reviewing how different tokens reacted to the news is a strategic action for ensuring you have the right assets in your portfolio for when a Spot Bitcoin ETF is announced.

As always, thanks for reading.🙏

Cryptonary out!