Analyst Increases Likelihood of Bitcoin ETF Approval to 95%
An analyst for Bloomberg Intelligence has raised their estimation for the likelihood of a spot Bitcoin ETF being approved in January to 95%. The U.S. Securities and Exchange Commission (SEC) is expected to make a decision on the applications this week. Previously, Bloomberg Intelligence estimated the odds of approval at 90%. However, the new estimation reflects growing confidence in the SEC’s decision. Bloomberg Intelligence’s ETF analyst Eric Balchunas responded to a tweet by fellow analyst James Seyffart, who was speculating on scenarios in which the SEC could reject the applications.
Possible Scenarios for Rejection
There are several scenarios in which the SEC could reject the current slate of Bitcoin ETF applications. These include Ark Invest withdrawing its application with assurances about March, SEC chair Gary Gensler denying the applications using new reasons, or ignoring the court order to review Grayscale’s ETF bid. Additionally, the Biden administration could take action to prevent approval. However, Balchunas still believes there is a small possibility of rejection, estimating it at 5%.
Caution from Crypto Betting Market
Participants in the crypto betting market Polymarket are more cautious, currently placing the odds of approval for a spot Bitcoin ETF by January 15 at 82%. This indicates some uncertainty surrounding the decision.
The SEC’s Window of Opportunity
The SEC has given Bitcoin ETF hopefuls until Monday morning to submit last-minute revisions to their applications. The commission has an open window until January 10 in which it could approve multiple applications simultaneously. The first stage of approval would involve signing off on 19b-4 filings by the exchanges planning to list the ETFs. Once approved, the ETFs could potentially begin trading the next business day.
Potential Worth of a Bitcoin ETF
If the SEC approves a Bitcoin ETF, it could have significant value. Balchunas suggests that the asset class could be worth as much as $10 billion in its first year.
ETF the “iTunes of Bitcoin”
Benjamin Dean, director of digital assets at WisdomTree, described a Bitcoin ETF as the “iTunes of Bitcoin.” He emphasized that it would provide security, reliability, and familiarity to institutional investors seeking exposure to the asset.
Skepticism and Current Bitcoin Price
Despite growing confidence, some remain skeptical about the approval of a Bitcoin ETF. A recent poll revealed that only 39% of financial advisors are confident that a Bitcoin ETF will be available to U.S. investors in 2024. As the SEC’s decision deadline approaches, Bitcoin is trading flat at around $44,000.
Hot Take: Increased Optimism for Bitcoin ETF Approval
Analysts are increasingly optimistic about the approval of a spot Bitcoin ETF by the SEC in January. Bloomberg Intelligence has raised its estimation for approval to 95%, reflecting growing confidence in the decision. However, there is still a small possibility of rejection. The SEC has an open window until January 10 to approve multiple applications simultaneously. If approved, a Bitcoin ETF could have significant value and make it easier for institutional investors to gain exposure to the asset. Despite this optimism, some remain skeptical about approval. As the decision looms, Bitcoin is trading flat at around $44,000.
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