The SEC had originally declined Grayscale’s application to convert the Grayscale Bitcoin Trust to an exchange-traded fund

Crypto prices continued to rally on Wednesday in London after news that investment firm Grayscale had moved closer to getting approval for a Bitcoin ETF.

The Securities and Exchange Commission had initially declined its application to convert the Grayscale Bitcoin Trust to an exchange-traded fund.

Bitcoin (BTC-USD) was trading 5.6 per cent higher by late-morning at near the $27,450 mark after the news. In the meantime ether (ETH-USD) rose 4.3 per cent to trade at $1,715.

Crypto exchange Coinbase’s stock also soared last night, increasing nearly 14.9 per cent by the close, although futures markets indicate it will open nearly 1.4 per cent lower today.

The idea behind a spot bitcoin ETF is that it would be traded through a traditional stock exchange, although the bitcoin would be held by a brokerage. It is designed to let investors gain exposure to the world’s largest crypto asset without having to own the coin themselves.

The SEC has only so far permitted crypto ETFs based on futures, as it considers them to be safer.

The Securities and Exchange Commission can still challenge the decision by taking it to a full slate of judges on the DC Circuit Court of Appeals or the US Supreme Court for review.

Matteo Greco, a research analyst at Finequia, says that crypto is not out of the woods yet.

Final decisions on when and if Grayscale will be able to list its product as an exchange-traded fund are yet to be made, he stated.

He said: At the current price level, nearly 2.5 million Bitcoin are held at a loss in the short term. Short term refers to those Bitcoin that were purchased less than 155 days ago. The figure shows the difficult moment for the market, with the price falling back to the level not seen since June.