Analysts say the best-case scenario for crypto is that the Securities and Exchange Commission approves the batch of spot Bitcoin ETFs, but the agency may exercise its right to an appeal.

Analysts say the best-case scenario for crypto is that the Securities and Exchange Commission approves the batch of spot Bitcoin ETFs, but the agency may exercise its right to an appeal.

The United States Securities and Exchange Commission is facing its first deadlines to decide on seven spot Bitcoin (BTC) exchange-traded fund applications, with the latest being Sept. 4 amidits defeat to Grayscale Investmentsin a U.S. federal appeals court.

Investment firm Bitwise will learn if its ETF will win the SEC’s approval on Sept. 1 while BlackRock, VanEck, Fidelity, Invesco and Wisdomtree will all be awaiting the SEC’s decision for their funds by Sept. 2,accordingto several SEC filings.

Meanwhile, Valkyrie is set to hear back from the SEC on Sept. 4.

List of recent Bitcoin spot ETF applicant filing dates and deadlines. Source: Bloomberg

The U.S. Court of Appeals ruled on Aug. 29 that theSEC’s rejection of Grayscale’s applicationto convert its Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF was “arbitrary and capricious” — but thisdoesn’t mean the SEC must approveGrayscale’s application or others in the future, says Bloomberg ETF analyst James Seyffart.

In an Aug. 29 Bloomberg interview, Seyffartexplainedthat Grayscale’s win “definitely” increases the odds of a successful outcome for the next wave of applicants.

He isn’t sure when that day may come, though, as the SEC can delay its decisions and has two more proposed deadlines for each fund before being forced to make a final decision on the 240th-day post-filing.

For the awaiting applicants, the final deadlines for the SEC are all in mid-March next year.

What are the SEC’s options post-Grayscale decision?

After the Aug. 29 ruling in favor of Grayscale, the regulator has 90 days tofilean appeal with the U.S. Supreme Court or apply for an en banc review — where a full circuit court can overturn a ruling made by a three-judge panel.

However, the SEC hasn’t made clear what its next move will be.

If the SEC doesn’t appeal the court will need to specify how its ruling is executed which could include instructing the SEC to approve Grayscale’s application, or at the very least revisit it.

Either way, Seyffart only saw two viable options for the regulator.

The first is for it to concede defeat and approve Grayscale’s conversion of its GBTC to a Bitcoin spot ETF.

Alternatively, the SEC would need to revoke the listing of Bitcoin futures ETFs entirely or deny Grayscale’s application based on a new argument, said Seyffart.

However, fellow Bloomberg ETF analyst Eric Balchunasconsideredthe odds of the SEC revoking the Bitcoin futures ETFs as “highly unlikely” because of the SEC's reported openness to Ethereum futures ETFs.