In a significant development, the U.S. Securities and Exchange Commission (SEC) has decided not to appeal a recent court decision favoring Grayscale Investments’ Bitcoin ETF conversion plans, according to a report by Reuters. The decision, which comes after a legal battle and months of anticipation, may signal a shift in the regulatory landscape towards the approval of a spot Bitcoin ETF by the SEC.

The decision, according to a confidential source close to the matter, was made internally at the SEC, following a federal court’s verdict allowing Grayscale to convert its Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF. This decision by the SEC not to pursue an appeal marks a significant milestone in the ongoing effort to introduce a Bitcoin exchange-traded fund to the U.S. market.

Grayscale’s victory in court was seen as a crucial test case, as it could potentially set a precedent for other spot Bitcoin ETF applicants seeking to convert their products into ETFs. The move towards a Bitcoin ETF has been highly anticipated in the space, as it could provide institutional investors with an easier way to gain exposure to BTC.

The Grayscale Bitcoin Trust is currently one of the most popular investment vehicles for exposure to Bitcoin, but its structure differs significantly from a traditional ETF. A successful conversion to a spot Bitcoin ETF would simplify the investment process and make it more accessible to a broader range of investors.

While the SEC’s decision not to appeal is being celebrated by many in the Bitcoin community, it’s worth noting that this does not equate to full approval of Grayscale’s conversion proposal. The regulatory body will continue to evaluate the proposal within its existing processes, ensuring that it complies with securities laws and investor protection standards.