A recent shift in sentiment has driven Bloomberg ETF analysts to heighten the approval rate of a US Bitcoin (BTC) spot ETF from 50% to 65%. This boost in optimism, spurred by “recent events and new information,” suggests that a significant change may exist.
New Bitcoin ETFDevelopments Signal Approaching Approval
Analysts James Seyffart and Eric Balcunas pointed to a flurry of fresh occurrences hinting that ETF approval is within reach. SEC Chairman Gary Gensler’s understated role at the agency and the regulator’s implicit endorsement of Coinbase as a Bitcoin exchange add weight to this projection.
An array of new contenders, including industry giants like BlackRock and Fidelity, have chosen Coinbase for a surveillance-sharing agreement. That fulfills SEC’s mandate for detecting possible BTC market manipulations.
The added impetus from BlackRock and potential Democrat support could make rejecting the ETF politically challenging for Gensler. Thus, the political landscape may significantly influence the ultimate decision, analysts opine.
Grayscale: A Beacon of Hope
The most encouraging sign, however, stems from Grayscale – the world’s largest Bitcoin fund owner. The firm is battling in court to transform its Grayscale Bitcoin Trust (GBTC) into a Bitcoin spot ETF, countering the SEC’s previous refusals as “arbitrary and capricious.” Grayscale holds firm that its proposed partner for surveillance-sharing, CME Bitcoin Futures, can meet the SEC’s stringent requirements.
In a recent twist, Grayscale submitted a letter to the SEC last week, arguing against approval for the recent applicants partnering with Coinbase. This argument rests on past refusals by the commission for applications with similar arrangements. If the SEC approves the recent applications, Grayscale contends, fairness dictates simultaneous approval for all ETF products, including its own.
Timelines and Deadlines: The Road Ahead
The SEC’s first deadline to greenlight one of the new ETF filings falls on August 13 for the Ark 21Shares Bitcoin ETF (ARKB). However, Seyffart acknowledges that this deadline might be pushed to January 10. Amidst these developments, Grayscale anticipates a verdict in its lawsuit against the SEC before Fall 2023, potentially sparking a wave of SEC approvals for other ETF products.
This intricate play of events underscores the intensifying suspense surrounding approving a US Bitcoin spot ETF. With market players and regulators engaged in a delicate dance, the stage is set for an intriguing unfolding of events. Whether or not the odds will tilt in favor of approval remains to be seen, adding yet another fascinating chapter to the evolving saga of cryptocurrency regulation.