Bitcoin ETF Optimism: SEC Approval Prospects Soar, Odds Of Disapproval Plummet To 5%

The excitement for the approval of a Bitcoin ETF by the United States Securities and Exchange Commission (SEC) has reached an unprecedented level, with analysts uncovering a few reasons why the market regulator would reject the product.

As per Eric Balchunas, a prominent analyst at Bloomberg specializing in ETFs, the likelihood of the spot Bitcoin ETF facing rejection has decreased from 10% to a minimal 5%. Balchunas emphasized the importance of maintaining a 5% margin for uncertainty, acknowledging that despite current industry assurances, unforeseen possibilities remain a factor to consider.

A unique response surfaced following James Seyffart’s prior post, where he, a Bloomberg ETF analyst, outlined three potential outcomes if the market regulator unexpectedly rejects a Bitcoin ETF, contrary to widespread anticipation.

Seyffart emphasized that in the event of a denial, GenZ investors are poised to react strongly, possibly resorting to extreme measures, and the SEC could find itself entangled in legal proceedings once more.

Reflecting on the past, Grayscale Investments previously took legal action against the SEC, emerging victorious in a lawsuit where the regulatory body opposed its bid to transform the Bitcoin Trust into a comprehensive spot Bitcoin ETF.

The court determined that the SEC’s refusal was “arbitrary and capricious,” leading legal analysts to speculate that the current leadership under Gary Gensler has exhausted its arguments for rejection in court and is unlikely to pursue a similar course.

Biden’s Influence On SEC’s Bitcoin ETF Decision: Seyffart Watches Closely

Ultimately, James Seyffart anticipates that the Biden administration would intervene to rectify any potential mishap should the SEC mistakenly reject an application for a Bitcoin ETF spot.

According to recent reports, BlackRock expresses confidence in approving its spot Bitcoin ETF application by Wednesday. This contributes to the overall positive outlook within the industry, reflecting optimism regarding the potential introduction of this traditional product.

Previously, Matthew Sigel from VanEck suggested the extent of BlackRock’s readiness for the iShares Bitcoin Trust. Notably, the firm has approximately $2 billion poised for injection into the market upon the long-awaited approval.

Analysts anticipate that the SEC will only subject applicants to the recent hurdles to change course and reject the product—analysts strongly expect to approve the product in the upcoming week.

The author’s views are for reference only and shall not constitute any investment advice. Please ensure you fully understand and assess the products and associated risks before purchasing.