A U.S. circuit court in Washington D.C. has ordered the Securities and Exchange Commission to revisit its rejection of a Bitcoin ETF application by crypto hedge fund Grayscale.

But that doesn’t mean the SEC won’t find new reasons to reject it or any of the dozen other applications.

SEC Rejection or Delay Could Tank Bitcoin Price

Crypto industry investors and insiders expect the price of Bitcoin and other crypto assets to surge if and when the SEC approves an exchange-traded fund for BTC. “It’s definitely going to pump quickly,” said DeCryptoFi founder and CEO Nicholas Scherling at a recent round table with Rob Nelson for TheStreet.

By the same token, however, news of any Bitcoin ETF rejections by the SEC could lead to a rout in Bitcoin price. In fact, ETF Store president and ETF Institute co-founder Nate Geraci warned Sunday that if the SEC doesn’t approve a Bitcoin ETF in January, markets could see one of the “bigger rug pulls in crypto history.”

If spot bitcoin ETF not approved in January, might be one of bigger rug pulls in crypto history…

Not my base case, but can’t entirely rule out given history here (which is why I said *close* to 100%).

That said, sticking w/ my original pre-Grayscale court victory prediction. https://t.co/zhlLDgMlzw

— Nate Geraci (@NateGeraci) December 18, 2023

The SEC shows no signs of making it easy for institutional financiers who want to launch a Bitcoin ETF. It has so far rejected “in-kind” structured ETFs and insisted on “cash create” ETFs by issuers. The form the SEC is insisting on will raise tax liabilities for issuers and perhaps fees for clients. The battle between funds and regulators could delay an ETF past January.

Spot Bitcoin ETF Threat to Crypto Exchanges

Referring to the average 0.01% fee for ETF trading on a Sunday, Dec. 17 post to X, senior Bloomberg ETF analyst Eric Balchunas quipped that a Bitcoin ETF is about to “unleash the Power of One (basis point). Nate Geraci replied that it will “be a bloodbath for crypto exchanges.”

Let’s check this 6mos after spot bitcoin ETFs launch…

Bet these tighten up pretty substantially. pic.twitter.com/aE6bMaALgV

— Nate Geraci (@NateGeraci) December 18, 2023

By contrast, crypto trading fees on popular crypto exchanges like Coinbase can go as high as 0.6%. Balchunas believes a crypto ETF will wipe out high trading fees for the original cryptocurrency. However, that would most likely be a net financial benefit for investors.