Bitcoin surges to two-week high after Grayscale ETF ruling

Bitcoin scaled and shares of cryptocurrency-related firms soared after a US court overruled the Securities and Exchange Commission's decision to restrict an ETF that invests directly in the cryptocurrency.

Grayscale Investments LLC received approval from a federal court to form the first Bitcoin exchange-traded fund in the United States, marking a watershed milestone in the cryptocurrency industry's aim to capture billions of dollars from average investors.

On Tuesday, Grayscale Investments' bitcoin trust posted an approximately 21 per cent gain, far outpacing bitcoin's gains, which were around 7 per cent, and causing the cryptocurrency to trade beyond $27,700.

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The crypto asset management firm won a federal court case, paving the way for the first bitcoin ETF to be launched in the United States and sparking a rise in the digital asset market. As a result of its strong performance on Tuesday in New York, the trust's discount to its bitcoin holdings shrank to less than 17 percent.

A federal appeals court decided on Tuesday that Grayscale Investments' application for a spot bitcoin exchange-traded fund should have been authorised by the U.S. securities and exchange commission.

A spot bitcoin ETF would allow investors to obtain exposure to the digital asset without needing to buy bitcoin on a retail exchange or keep the currency in a separate crypto wallet; thus, the judgement may be good news for bitcoin.

Many in the industry predicted that Grayscale would prevail in its dispute with the U.S. SEC, and now they're trying to figure out what Tuesday's news means for the many other issuers who have applications out for a spot bitcoin fund and the timeline.

The court ruling was hailed as a major milestone for the cryptocurrency sector since supporters had campaigned for a spot bitcoin ETF for years. For the last decade, U.S. authorities have repeatedly denied registrations by issuers, citing grounds such as fraud and market manipulation each time.

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