Odds of Spot Bitcoin ETF Approval Improve by 75% after Grayscale’s Victory

Odds of Spot Bitcoin ETF Approval Improve by 75% after Grayscale’s Victory

Bloomberg ETF analysts James Seyffart and Eric Balchunas have recently updated their estimates of the odds of the spot Bitcoin ETF coming to the US markets. Following Grayscale’s victory over the US SEC, the two analysts expect a 75% probability of approving the spot Bitcoin ETF by the end of this year.

And by the end of next year in 2024, this could probably be almost a “done deal”. In his message on the X platform, on Wednesday, Eric Balchunas wrote:

“James Seyffart and I are upping our odds to 75% of spot bitcoin ETFs launching this year (95% by end of 2024). While we factored Grayscale win into our previous 65% odds, the unanimity and decisiveness of ruling was beyond expectations and leaves the SEC with very little wiggle room.”

Seyffart also confirmed the same saying:

“A lot of people were asking yesterday. Eric and I have moved to 75% for a 2023 launch of a spot bitcoin ETF and we think it’s almost a done deal that we will have one launched by the end of 2024.”

The deadlines for the SEC to decide on the approval, rejection, or postponement of applications from companies like BlackRock, Bitwise, VanEck, WisdomTree, Invesco, Fidelity, and Valkyrie range from September 1 to September 4. However, experts are anticipating potential delays.

“We won’t be surprised if the SEC opts for delays considering the recent court ruling. However, in this scenario, timelines might not carry as much weight. It’s more plausible that we wake up one day to news of the SEC relenting, signaling an imminent launch,” stated Balchunas.

“We anticipate that the SEC will issue delay orders for several applications this week. Approvals, considering the recent court decision, appear unlikely to be granted so swiftly,” Seyffart remarked.

What’s SEC’s Next Move after Graysale’s Victory?

In the recent court decision, Grayscale Investments secured a victory in its case against the SEC regarding its application for a spot Bitcoin ETF. This ruling could have broader implications for similar spot Bitcoin ETF applications.

Following the court’s verdict, the Bitcoin price experienced a 5.4% surge to $27,450. This also coincided with the narrowing of the GBTC discount to net asset value from -25% to -17%.

The court criticized the SEC’s inconsistent approach towards spot and futures-based Bitcoin ETFs. Grayscale’s proposed Bitcoin ETF shares similarities with already approved Bitcoin futures ETFs, both in terms of underlying assets and surveillance-sharing agreements. The court deemed the SEC’s denial of Grayscale’s proposal as “arbitrary and capricious”.

Within the next 45 days, the SEC can request a rehearing. After this timeframe, the court will issue a final mandate along with additional directives.

The SEC now has the options to approve the conversion of GBTC into an ETF, reject it for other reasons, or potentially compel the closure of existing futures-based bitcoin ETFs.


Odds of Spot Bitcoin ETF Approval Improve by 75% after Grayscale’s Victory

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