The Bitcoin ETF RULING: SEC *JUST SLAPPED* | Full Explanation.

is this what we've been waiting for for

Bitcoin we have an absolute explosion in

the price of Bitcoin as you can see

going right back to our resistance level

in a straight up Candle on the day folks

is this the breakout moment for Bitcoin

or is there more disappointment ahead

and why did this happen well let's make

it clear this is happening because we

finally had a judge put the SEC in their

place on BTC but it doesn't end the door

or or end the fight for actually getting

a Bitcoin spot ETF approved in fact this

is just one of many parts in the fight

let me try to catch you up to speed as

simply as possible basically grayscale

Bitcoin trust has Bitcoin as assets in

their company and they're listed on the

stock market as an investment trust you

have to be in a credited investor to get

into and because of the lack of ability

to get in and out of this fund the

grayscale Bitcoin trust trades at a

discount to the value of the Bitcoin so

the Bitcoin is worth more than what the

company is trading for so the company's

like turn us into an ETF already so

people can just buy Bitcoin through an

exchange traded fund and they don't have

to worry about blockchain uh you know

Ledger backup systems hard wallets uh

you know whatever they don't have to

worry about their coins and none of that

now of course to some extent you could

make the argument that you know well

first of all not your keys not your

crypto and you should want your keys

right and that's fair many people in

crypto no no no no we want our keys

thank you very much but there are huge

swaths of the industry especially from

an Institutional Investor point of view

where people want Bitcoin as a hedge but

they can't buy it because they need it

to be in an ETF vehicle I'll give you an

example

my ETF because I run an actively managed

ETF could buy a Bitcoin ETF as a hedge

to other stocks that we have but we

can't buy Bitcoin directly so of course

the Bitcoin Community says this would be

great if we get a spot ETF there's gonna

be so much more demand for Bitcoin and

you'll actually see this Arbitrage

opportunity clear at the grayscale

Bitcoin trust which will make a lot of

people a lot of money now it's worth

noting that there's been a lot of

speculation and excitement that hey this

ETF approval is near that you know

companies like BlackRock are going to

file for a black or a Bitcoin ETF only

to get denied so it seems like the

pressure is really building on the SEC

and eventually it's gonna you know

culminate in basically a listed ETF

that's unfortunately not what we have

right now we have just another step in

the process we're closer but not there

yet keep in mind the SEC has gone into

Bitcoin coin as saying hey look we don't

need another digital currency this is

Gary Gensler specifically I shouldn't

say that on behalf of the entire SEC

since there are probably people at the

SEC who feel otherwise but Gary Gensler

himself said hey we don't need another

digital currency we got the US dollar

that's digital we could digitally send

that money all day long what do you need

Bitcoin for this has led a lot of people

to have a sour taste in their mouth for

the SEC because they think potentially

the SEC is embarking on a sort of

political or a dollar protecting uh uh

sort of mission rather than uh or

Crusade maybe might be the word rather

than actually applying the law equally

and that is actually exactly what the

judge just said in this uh Accord ruling

where the SEC got a little bit of a slot

now I want to explain this slap because

again it's not a clear approval and I'm

going to keep this sound as simple as

possible because I read this this entire

ruling and it is complicated so we're

going to simplify it and then we'll get

to the gist of it keep in mind we've got

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Legal Financial advice to either

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your job or your Properties or llc's or

this that or whatever we can actually

give real Financial advice because I'm a

licensed financial advisor anyway so

let's go into this ruling over here I'm

going to start at the back because it's

a little easier so at the back you're

going to see in the absence of a

coherent explanation

this unlike regulatory treatment of like

products is unlawful we therefore Grant

gay grayscales petition for review and

vacate the commissioner's order

okay nobody's gonna understand that line

so let's try simple words here and again

I read the whole ruling so I'm going to

just simplify this basically

here's grayscale and uh this is

grayscale and they have a product called

an exchange traded product an ETP like

an ETF okay in order to list this to

list this on something like uh a stock

exchange like we'll call it NYSE and

then the New York Stock Exchange for

ETFs is the Arca division so NYSE ARCA

in order to list on the NYSE ARCA

exchange you must be qualified

qualified qual by the regulator okay so

we're going to call this the regulator

there we go and that is the SEC

so uh in other words the SEC has to

bless your documents before you can go

list on the exchange and what's

basically happened is other companies

have come forward and said hey look

we're another company here like the

valkyrie trust or whatever and we have a

product called a Bitcoin Futures ETF

which we would like to list on the CME

the Chicago Mercantile Exchange and uh

the SEC has said to this yeah okay uh

we're okay with that so the SEC said

okay to listing a Bitcoin Futures

ETF which is basically a contract right

it's not actually Bitcoin it's a

contract the SEC has said okay to this

but here they said no thank you in other

words we won't review thereby blocking

your access to getting getting into ARCA

now this Court ruling does not say you

are green lit to get on to ARCA

in fact all this does is say hey SCC you

need to continue this process right here

this qualification process you can't

just stand in the way and say you know

what we just decided to not even go that

far if you know forget about you getting

listed on ARCA we're not even going to

go that far because we're not even going

to approve like we're not even going to

review your

um Bitcoin ETF filing so the SEC has put

that X there that blockade and this

Court ruling is saying no no you need to

give them the same uh review process as

you gave others that's really what this

court review is saying and the reason

they make this argument is throughout

the various different pages of this

document of this ruling they say that

there are really two prongs for

determining whether a fund uh like a

Bitcoin ETF should exist or not and

really the biggest piece that the s CC

seems worried about or the biggest two

pieces I'm going to write them down are

price

Discovery and fraud those are the two

big pieces now again this is a nearly 30

page document going into all the

specific details of this but I'm going

to give you the simplified version here

price Discovery is basically saying look

if that grayscale ETF is going to buy uh

Bitcoin and shares of that ETF are going

to be listed on the NYSC on the Arca

fund then the more money that flows into

the ETF the more Bitcoin that ETF has to

go control and we don't want this ETF

controlling too much of the Bitcoin

Market to where all of a sudden the

Bitcoin Market is being influenced by

the ETF so that's one thing not having a

disproportionate share of the market so

uh we'll call this uh we'll say not too

big of a market impact and the S it's uh

it's the sec's responsibility to prove

uh with with an explanation

that what coinbase is saying or not

coinbase like what grayscale is saying

is untrue so grayscale is saying look

one we're not too big we're not going to

have too big of a market impact we're

not going to affect the underlying value

of Bitcoin that much so that's not a big

deal and it's the sec's responsibility

to I guess I shouldn't say prove but

respond with a coherent explanation to

that claim which so far they haven't

done enough for the judge to be happy of

and keep that in mind

so again grayscale hey we're not we're

not going to impact the market with this

ETF okay great the second thing is uh we

won't be affected by fraud that's a big

deal that the SEC wants is the SEC wants

to see like if someone on the blockchain

gets hacked and there's some fraud is

that going to affect the ETF and

therefore the investors in the ETF

and then the third thing they're looking

for outside of price Discovery uh or or

rather

um Market impact from the ETF on pricing

and fraud the third thing is fair

pricing so that's different from the

market impact this is really where

grayscale says look when we study the

market we find that the prices we can

get have a 99 match to the market rate

the spot rate of Bitcoin now that's

really important because really

grayscale is telling you hey look we

believe that we are not going to be

affected by fraud we believe we're not

going to have too big of a market impact

and we believe based on the studies and

research we provide that we're not going

to get you know distorted pricing we're

going to be able to get Fair spot

pricing for this ETF now here it is in

the judge's words number one the SEC

does not indicate that

fraud would actually impact the spot

price of Bitcoin in other words the

judge here is saying like all right SEC

if you're going to block them because

you're worried about fraud prove it

the second thing uh they say the spot

market and Futures Market are so tightly

correlated you have to prove that

there's a D-Link between these two the

the Futures market and actual Bitcoin

because remember you have approved uh

and been okay with a Futures ETF so why

are you okay with the Futures ETF but

not the spot one that violates something

known as the administrative procedures

act where you're not applying the law

equally to similar products so that

pisses the judge off that's where the

judge here number three says the

commission failed to treat cases alike

and here the judge argues in two

different paragraphs hey look we're also

not convinced that just because

grayscale has an ETF they're not going

to get spot prices or they're going to

have a or they're going to have too much

of a predominant influence on prices in

other words the judge is basically

saying look the reasons you gave for not

approving this ETA f are not good enough

and therefore you need to go back and

make sure you provide better reasons

or approve it

unfortunately my expectation is that the

SEC is going to say all right we'll

rewrite it and provide a bunch of new

reasons

so in other words they'll just deny

grayscale again they could really kick

the can down the road on this for

another year plus that's possible unless

the SEC has a change of Hardware like

you know what this isn't worth the fight

then they might end up approving it

which would be obviously very bullish

for the future of BTC uh but in the near

term this doesn't get us as close to a

Bitcoin ETF as I think the market is

hoping as the SEC could if they wanted

to drag this out for a very long period

of time so hopefully that's a useful

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