The ruling requires the SEC to review Grayscale's application, although the agency still has time to appeal the court's decision. A spot bitcoin ETF would give investors exposure to the world's largest cryptocurrency without having to own it. The SEC has denied all spot bitcoin ETF applications, saying applicants have not shown they can protect investors from market manipulation. Grayscale argued the same setup should be satisfactory for its spot ETF, since both products rely on bitcoin's underlying price. The appeals court ruled that the SEC arbitrarily denied Grayscale's application because it never explained why the two arrangements were materially different.

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Persons: Dado Ruvic, Grayscale's, DavisPolk, Michelle Price, Tomasz Janowski Organizations: REUTERS, Rights, U.S . Securities, Exchange Commission, SEC, District of Columbia, Chicago Mercantile Exchange, Thomson Locations: Washington