Analysts Say Spot Bitcoin ETF Approval Odds Surge To 65% In 2023

Key Points:

• Bloomberg analysts increase the likelihood of spot Bitcoin ETF approval in the US to 65%, up from 1% a few months ago.
• Recent events, including SEC Chair’s remarks and Grayscale’s case, contribute to the growing optimism for ETF approval.
• Traditional financial institutions’ interest, like BlackRock’s involvement, may boost the chances of a spot Bitcoin ETF gaining regulatory approval.

Bloomberg Intelligence ETF analysts have recently revised their predictions for the approval of a spot Bitcoin exchange-traded fund (ETF) in the United States, raising the odds to 65%.

This marked increase in likelihood is a significant jump from just a few months ago when the chances were a mere 1%. The shift comes amidst a series of crucial events in the cryptocurrency market and regulatory landscape.

Notably, SEC Chair Gary Gensler’s recent remarks downplaying his role at the Securities and Exchange Commission have fueled optimism among market participants. The change in Gensler’s tone suggests a potential opening for Bitcoin ETFs within the regulatory framework.

Moreover, the ongoing Grayscale case has garnered attention as the company attempts to minimize filings, and the SEC faces a loss in front of the same judges. These developments have further stoked speculation about the approval of a spot Bitcoin ETF. James Seyffart, a Bloomberg ETF analyst, believes that the outcome of the Grayscale case could play a decisive role in the approval process. A victory for Grayscale over the SEC may trigger a series of approvals for various spot Bitcoin ETF filings by the end of the fourth quarter later this year.

The collaboration between BlackRock and Coinbase on a surveillance sharing agreement (SSA) has also significantly influenced analysts’ perspectives. This partnership has altered the analysis of spot Bitcoin ETF prospects and contributed to the growing optimism surrounding its potential approval. Seyffart noted that the Ripple case, while less critical, remains relevant and could also impact the final decision.

The pursuit of a spot Bitcoin ETF gained momentum with BlackRock‘s filing on June 16, which prompted a flurry of applications from other institutional giants such as WisdomTree, Invesco, Valkyrie, and others. Despite previous rejections of spot ETF filings by the SEC, the surge in applications during the second quarter of 2023 indicates that this year could prove crucial for spot Bitcoin ETF approvals.

Analyst Eric Balchunas highlighted the interest shown by traditional financial institutions, particularly BlackRock, as a potential catalyst for approval. The backing of institutional giants may increase the chances of a spot Bitcoin ETF gaining regulatory approval.

However, Seyffart remains cautious, emphasizing that the timing of the Grayscale case and its outcome are crucial factors. The approval of a spot Bitcoin ETF largely depends on the result of Grayscale’s ongoing lawsuit against the SEC.

In the midst of the SEC’s ongoing review of Bitcoin ETF applications, other significant players such as Volatility Shares, Bitwise, VanEck, Roundhill, ProShares, and Grayscale have also filed applications for Ether ETFs, indicating a growing interest in the cryptocurrency market.

The mounting pressure on the SEC and the US Congress to approve Bitcoin ETFs, and potentially Ethereum ETFs, highlights the significance of 2023 in shaping the digital asset industry.

Grayscale’s current lead over competitors, such as Ark Invest and 21 Shares, in the Bitcoin ETF race adds further anticipation to the eventual outcome. With a predicted 65% chance of approval, stakeholders in the crypto space are closely monitoring regulatory developments, hoping for a breakthrough in the acceptance of spot Bitcoin ETFs.

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