Marathon Digital (NASDAQ:MARA) stock and other Bitcoin (BTC-USD) miners are on the rise after Grayscale won an appeals court decision that could let it turn the Grayscale Bitcoin Trust (OTCMKTS:GBTC) into an exchange-traded fund (ETF).
Specifically, MARA shares rose more than 28% on Aug. 29 before giving back some of those gains overnight. MARA stock opened today, Aug. 30, at $13.37 per share and a market capitalization of over $2 billion. Now, the stock is down by about 7% as of this writing.
The entire Bitcoin-related stock complex also rose in sympathy with the decision. Among the miners, Riot Platforms (NASDAQ:RIOT) rose 17%, Bit Digital (NASDAQ:BTBT) rose 13% and Bitfarms (NASDAQ:BITF) climbed 16% yesterday. Shares in crypto exchange Coinbase (NASDAQ:COIN) also shot up 15% while Bitcoin itself rose more than 5%. Indeed, Bitcoin traded for $27,300 per coin early this morning.
A Good Day for Bitcoin
Cryptocurrency advocates have been fighting the U.S. Securities and Exchange Commission (SEC) in court all year. The regulator considers most crypto coins to be unregistered securities.
In a unanimous ruling by a three-judge panel, however, Circuit Judge Neomi Rao called the SEC’s rejection of Grayscale’s application “arbitrary and capricious” because the agency “failed to explain its different treatment of similar products.” The SEC said it rejected the Grayscale application “on the basis that spot markets for bitcoin are unregulated and subject to market manipulation.”
The SEC now has several options. It could grant the application, appeal the decision to the Supreme Court, or even deny the application again with a different justification. The SEC could also rescind its prior approval of Bitcoin futures ETFs. The agency said that it is “reviewing the court’s decision to determine next steps.”
Bitcoin is the only cryptocurrency the SEC has said is outside its jurisdiction, calling it a commodity. Analysts believe the market for Bitcoin ETFs could represent 10% of Bitcoin’s market capitalization in a few years. Bitcoin’s market cap is currently $530 billion.
Crypto media was ecstatic over the Grayscale decision, calling it a “second landmark win” after Ripple’s win with XRP (XRP-USD) last month.
What Happens Next?
The Ripple decision was in a district court case. It only allowed individual sales of XRP on exchanges, not direct sales to institutions. All told, the SEC is unlikely to give up on its crypto crusade.
On the date of publication, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
