Bloomberg senior analysts Eric Balchunas and James Seyffart have raised their approval odds of the first Bitcoin spot exchange-traded fund (ETF) in the United States (US) to 75%.
This development comes after the US District of Columbia Circuit ruled against the US Securities and Exchange Commission (SEC), stamping out the regulator’s denial of Grayscale’s conversion of its Grayscale Bitcoin Trust (GBTC) into a Bitcoin ETF.
Court “Unanimity And Decisiveness” Unexpected, SEC Now In Tight Spot, Analysts Say
According to his X post on August 30, Eric Balchunas explains that the new stance from him and his colleague was based on certain developments in Grayscale’s case against the SEC.
Although the Bloomberg analyst stated that a Gracyscale victory had been factored into their last 65% approval odds of a Bitcoin spot ETF, the court’s “unanimity and decisiveness” in ruling against the SEC was quite unanticipated.
NEW: @JSeyff & I are upping our odds to 75% of spot bitcoin ETFs launching this yr (95% by end of ’24). While we factored Grayscale win into our prev 65% odds, the unanimity & decisiveness of ruling was beyond expectations and leaves SEC w “very little wiggle room” via @NYCStein pic.twitter.com/IyEGmWjuHa
— Eric Balchunas (@EricBalchunas) August 30, 2023
Furthermore, Balchunas explains that the SEC now faces a PR loss as Grayscale’s victory received media coverage from top media firms across the country. Combining this situation with the recent court defeat, the commission’s denial of the Bitcoin spot ETF will be “politically untenable.”
In their official report, both Balchunas and Seyffart also highlighted that the SEC’s dilemma worsens as it faces its first deadlines on seven Bitcoin spot ETF applications between September 1 and September 4.
However, following the recent court ruling, the Bloomberg analysts believe the securities regulator will likely give a delayed order.
Finally, if the SEC is somehow able to deny all applications, the analysts state the financial agency will struggle to reject Hashdex’s unique proposal.
On August 25, the Brazillian asset manager filed to introduce a mixture of Bitcoin spot and futures ETF, secured by the Exchange for Physical (EFP) transactions, instead of a surveillance-sharing arrangement (SSA) with a crypto exchange.
Based on all the factors listed above, Balchunas and Seyffart rate the approval chances of a Bitcoin spot ETF in 2023 at 75%, with the potential of these odds rising to 95% at the end of 2024.
Following the influx of Bitcoin spot ETF applications in June, there has been much optimism about the potential effects these trading products could have on the premier cryptocurrency.
A Bitcoin spot ETF tracks the price of BTC, granting investors indirect exposure to the asset without the risks of direct investment in the cryptocurrency itself. According to hedge fund expert Tom Lee, a spot ETF will likely create a high demand-to-supply ratio of the largest crypto asset, pushing its prices of BTC as high as $185,000.
Related Reading: Ethereum ETF Race Gets Hotter As SEC Receives 11 Filings In One Week
The market leader rose by over 7% following Grayscale’s court victory to trade at $27,974.42, according to data from Coingecko. However, BTC soon experienced a price correction, finding support around the $27,000 price zone.
At the time of writing, Bitcoin is trading at 27,229.89 with a 0.9% loss in the last day.
BTC trading at $27,223 on the daily chart | Source: BTCUSD chart on Tradingview.com
Featured image from Forbes India, chart from Tradingview.