An analyst for Bloomberg Intelligence has increased their estimation for the likelihood of a spot Bitcoin ETF being approved in January to 95%, as a window for the U.S. Securities and Exchange Commission's decision looms this week.
In a tweet Saturday, Bloomberg Intelligence's ETF analyst Eric Balchunas said he would "probably go with 5% at this point" in reference to the likelihood of the SEC rejecting the spot Bitcoin ETF applications on its desk.
That's a step up from Bloomberg Intelligence's previous estimation that the odds of a Bitcoin ETF being approved in January were 90%.
Balchunas was responding to a tweet by fellow Bloomberg Intelligence analyst James Seyffart, who was speculating on the "unlikely" scenarios in which the SEC could reject the current slate of applications.
Well said although I probably go with 5% at this point. But you gotta leave a little window open for these things.
They 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, "knowing they'd end up back in court." President Joe Biden's administration could also do "something to stop this," he added.
Participants in crypto betting platform Polymarket are more cautious, currently placing the odds at approval of a spot Bitcoin ETF by January 15 at 82%.
The SEC's window of opportunity
Per Bloomberg, Bitcoin ETF hopefuls have been given until Monday morning to submit last-minute revisions to their applications. The SEC has an open window until January 10 in which it could approve multiple applications simultaneously.
The first stage in approval of a spot Bitcoin ETF would be the SEC signing off on 19b-4 filings by the exchanges planning to list the ETFs, all of which were submitted by 6 p.m. ET on Friday. The SEC would then need to approve the issuers' S-1 applications; with both approved, the ETFs could technically begin trading the next business day.
Speaking to Rug Radio last week, Balchunas said that, "We've been hearing that the SEC has been working with the issuers on their 19B-4s." He added that, "They're going back and forth on drafts. So that's why we've seen S-1 get updated. But the 19B-4s edits have gone right to the SEC. They haven't been refiled."
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Bloomberg Senior ETF Analyst Eric Balchunas joins Farokh Sarmad, Michael Anderson, and Ovie Faruq on the FOMO Hour to share the latest intel on the looming approval for a spot Bitcoin ETF, what might happen when the very different worlds of TradFi and crypto collide, and his insights on “Genslish,” the unique and strategic language of SEC chair Gary Gensler.
"So when we see those refiled, we'll know that the SEC has signed off on them as being final,” he explained.
Balchunas added that if the SEC approves a Bitcoin ETF, the asset class could be worth as much as "$10 billion in year one."
ETF the "iTunes of Bitcoin"
In a statement emailed to Decrypt, Benjamin Dean, director of digital assets at Bitcoin ETF applicant WisdomTree likened a Bitcoin ETF to the "iTunes of Bitcoin."
"A spot Bitcoin ETF would provide the security, reliability and familiarity of an ETF structure to this asset in the U.S.," he said, "which could make it easier for more institutional investors to gain exposure to the asset."
Others remain skeptical that an ETF will be approved; last week, a poll of financial advisors by Bitwise revealed that just 39% are confident that a Bitcoin ETF will be available to U.S. investors in 2024.
As crunch time looms on the SEC's decision, Bitcoin was trading flat at around $44,000, per data from CoinGecko.
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The U.S. Bitcoin ETF Race
Many firms have filed applications for a spot Bitcoin ETF in the U.S., but the Securities and Exchange Commission (SEC) has historically rejected all of them. That could be set to change in 2024.
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