Aaryamann Shrivastava
FXStreet
- ETF analysts Eric Balchunas and James Seyffart tweeted that they are increasing their prediction of a spot Bitcoin ETF approval.
- The SEC was recently reprimanded for its arbitrary denial of Grayscale’s application to turn GBTC into an ETF.
- Over the next week, the SEC will be facing the deadlines of multiple spot Bitcoin ETF applications.
Spot Bitcoin Exchange Traded Funds (ETFs) have been the focus of the crypto industry for the past couple of weeks. As BlackRock filed its application, many other firms followed, but the Securities and Exchange Commission's (SEC) stand kept the market skeptical of their approval. Regardless, senior ETF analysts have suddenly increased their odds of approval this week.
Spot Bitcoin ETF approval chances go up
Spot Bitcoin Exchange Traded Fund became the spotlight of the market after the world’s biggest asset manager, BlackRock, filed an application. However, the approval of the application still resides in the hands of the Securities and Exchange Commission. The regulatory body has been rather unfavorable of the approval.
Nevertheless, senior ETF analysts Eric Balchunas and James Seyffart tweeted an update to their forecast of a spot Bitcoin ETF approval. According to their post, the chances of approval of such an ETF are now 75%, owing to Grayscale’s recent win.
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
Earlier this week, the US Court of Appeals for the DC Circuit ruled in favor of Grasycale in its lawsuit against the SEC. The regulatory body was sued for denying the request to convert the Grayscale Bitcoin Trust (GBTC) into an ETF.
The SEC earlier gave the reason that such ETFs were prone to price manipulation due to the lack of a regulating authority similar to the Chicago Mercantile Exchange (CME) for Futures Bitcoin ETFs. The court disregarded this point as a concern, stating,
“Because the spot and futures markets for bitcoin are highly related, it stands to reason that manipulation in either market will affect the price of bitcoin futures. The denial of Grayscale’s proposal was arbitrary and capricious because the Commission failed to explain its different treatment of similar products.
The court ruled that the SEC must review Grayscale's spot Bitcoin ETF application. This win was a contributing factor to the rally that brought Bitcoin price above the $27,000 mark on August 29. In the coming few days, the SEC will be facing the deadlines for a bunch of other spot Bitcoin ETF applications. The first in line is the Bitwise Bitcoin ETP Trust, the deadline for which is on September 1.
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Upcoming spot Bitcoin ETF application deadline
The SEC already delayed its decision on ARK Invest’s spot Bitcoin ETF application this month and could do the same with Bitwise as well.
Interestingly, over the past hour, Bitcoin price declined, bringing BTC down by 2% to trade at $27,145.
BTC/USD 1-day chart
Further delays in the ETF approval might threaten the presence of the cryptocurrency at this level.
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