Bloomberg analysts have amplified the odds of a spot Bitcoin Exchange-Traded Fund (ETF) receiving regulatory approval to an impressive 65%.
This disclosure was shared on Thursday, August 3 by James Seyffart, a crypto assets analyst, and Eric Balchunas, the head of ETF at Bloomberg. The latest reassessment marks a notable increase from their previous estimate of 50% just a few weeks ago and a remarkable leap from a mere 1% a few months prior.
Seyffart and Balchunas acknowledged that this revised stance is grounded in recent developments and newfound insights, which have shifted the landscape surrounding the highly anticipated Bitcoin ETF approval.
“The odds of a Bitcoin ETF launching this year are up to 65%, in our eyes, after a flurry of developments,” they wrote.
According to the duo, one of the reasons for raising their odds was the recent move by the SEC ordering Coinbase to delist all other cryptocurrencies apart from Bitcoin. Considering Coinbase’s prominence as the most favoured custodian in the US for many existing applications, the duo suggested that the SEC’s tacit approval of Coinbase’s Bitcoin exchange significantly boosts the likelihood of ETF approval.
“This solidifies our view that if the SEC is going to bend anywhere on crypto ETFs, it will be with regard to bitcoin ETFs,” said Seyffart and Balchunas.
Notably, emphasizing the unfolding legal proceedings involving Grayscale, the two observed that the potential outcome of the Grayscale case in Federal court could serve as the lynchpin to their current thesis. Last year, the SEC denied Grayscale’s request to convert the major bitcoin trust into an ETF, leading to a lawsuit by the asset manager.
According to them, a favourable verdict for Grayscale against the U.S. Securities and Exchange Commission (SEC) might pave the way for a series of SEC approvals, potentially materializing in the fourth quarter of 2023.
“We are completely guessing on the timing of the Grayscale case dates. But we think the path of least resistance is simultaneous approval for all 8 filers + Grayscale in the aftermath of the courts vacating the SEC’s denial,” they wrote.
Seyffart and Balchunas also pointed to the likelihood of Gensler eventually bowing to the pressures from Blackrock and Democrats, some of whom are already calling for his removal.
This bold revision of the ETF approval odds comes on the heels of massive applications by various institutions for various Bitcoin ETF approvals to the U.S. Securities Exchange Commission. So far this year, multiple firms have embarked on new spot Bitcoin ETF filings, while a handful of others have resubmitted their applications following multiple prior rejections by the SEC.
SEC chair Gary Gensler has previously made known his position on Bitcoin spot ETFs, citing concerns about their susceptibility to manipulation. Last week, Gensler took a swipe at crypto, warning investors that the sector was “rife with fraud” and emphasizing the SEC would continue cracking down on rogue actors to protect investors.