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Valkyrie CEO said Grayscale’s suit against the SEC is not likely to succeed Osprey Funds leader believes a spot bitcoin ETF will not be approved during SEC Chair Gary Gensler’s administration Grayscale Investments is crafting its initial arguments against the SEC following the agency’s denial of the company’s bitcoin ETF proposal, although some are unconvinced the decision will be overturned.

“We think that we have very common-sense and compelling arguments here and we think the court will be able to see that as well.” Grayscale filed a petition for review with the US Court of Appeals for the District of Columbia Circuit Wednesday evening when the SEC rejected the conversion of its bitcoin trust (GBTC) to an ETF.

“Both types of ETFs are priced based on the underlying bitcoin markets, and so if you’re OK with one for an ETF, then you also should be OK with the other,” Salm said Friday.

“The SEC explicitly is allowed to approve and deny exchange rules based, essentially, on whatever they like.” To rule in Grayscale’s favor, Nadig added, the SEC would essentially have to decide that because it allowed derivatives products, it must allow a product focused on the underlying asset.

“By that logic, they’d have to allow all sorts of really unworkable products, like a physical oil product.” Leah Wald, CEO of Valkyrie Funds, said in a series of Twitter posts Thursday that suing the SEC is not likely to succeed, noting that regulators could potentially approve a spot bitcoin ETF before Grayscale’s lawsuit ends.

“But in order to keep assets flowing in and ensure institutions remain engaged, this is the only real move they have left.” The SEC also rejected Bitwise Asset Management’s spot bitcoin ETF application this week.

Greg King, CEO of crypto fund issuer Osprey Funds, said the SEC’s decisions on the Grayscale and Bitwise applications were what he expected.

“This rejection confirms our belief that no spot bitcoin ETF will be approved in [SEC Chair Gary] Gensler’s administration.” Gensler’s current five-year term expires in 2026.