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Bitcoin ETFs have 75% chance of approval this year: Bloomberg analysts

August 31, 2023 Coin Telegraph

Bitwise

Bloomberg ETF analysts raised their odds for a spot Bitcoin ETF approval after the recent Grayscale victory against the SEC.

Bloomberg analysts have raised the probability for an approved spot Bitcoin exchange-traded fund (ETF) by the end of 2023, following a recent Grayscale victory against the federal securities regulator.

In a Aug. 30 post on X (Twitter), Bloomberg senior ETF analyst Eric Balchunas said they have raised the chances to 75% from an earlier 65% — due to the unanimity and decisiveness at which the United States Court of Appeals Circuit reached its decision in the recent case.

“The judges unanimously repudiated the SEC’s arguments, and the agency will struggle to justify further denials as it faces deadlines,” Bloomberg analysts James Seyffart and Elliot Stein added in a separate Aug. 30 note.

NEW: @JSeyff & I are upping our odds to 75% of spot bitcoin ETFs launching this yr (95% by end of '24). While we factored Grayscale win into our prev 65% odds, the unanimity & decisiveness of ruling was beyond expectations and leaves SEC w "very little wiggle room" via @NYCStein pic.twitter.com/IyEGmWjuHa
— Eric Balchunas (@EricBalchunas) August 30, 2023

In his own post on X, Seyffart added that spot Bitcoin ETF approvals will likely be a “done deal” by Q4 2024, estimating the approval odds to have now skyrocketed to 95% by then.

Balchunas added that given the recent legal and public relations loss, a denial by the SEC will be “politically untennable.”

Beyond the legal loss, there is also the PR loss (which matters bc it sets narratives, changes minds). And this got covered far and wide in mainstream media incl NYT, WSJ, CNN, AP, ABC & on and on. We think the legal and PR loss will combine to make denial politically untenable. pic.twitter.com/Uarh5CszXC
— Eric Balchunas (@EricBalchunas) August 30, 2023

Over the next five days, seven Bitcoin spot ETF applications are due for a “first deadline” decision by the SEC, including Bitwise, BlackRock, VanEck, Fidelity, Invesco, Wisdomtree and Valkyrie.

Balchunas said he “wouldn’t be surprised” if the SEC delays these upcoming Bitcoin spot ETF applications.

But the most likely outcome will be that we unexpectedly wake up to the SEC giving in and approving the Bitcoin spot ETFs in one hit, he said.

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Grayscale fires first salvo in case against SEC over Bitcoin ETF refusal

October 12, 2022 Coin Telegraph

Brief

The SEC must submit its brief by Nov. 9. After that, Grayscale will then submit a reply brief on Nov. 30 before both parties submit a final brief on Dec. 21.

Digital asset manager Grayscale has filed its opening brief against the U.S. Securities Exchange Commission (SEC) to challenge its decision denying Grayscale’s application to convert the Grayscale Bitcoin Trust (GBTC) to a spot Bitcoin ETF.

The world’s largest digital asset management firm filed its opening legal brief on Oct. 11 in the U.S. Court of Appeals in the District of Columbia Circuit, in which it claimed the SEC’s knockback to be “arbitrary, capricious and discriminatory.”

Grayscale argued that the SEC treats spot Bitcoin Exchange-Traded Products (ETPs) with “special harshness” and is doing so “in excess of its statutory authority.”

Attorneys for Grayscale argued that several Bitcoin Futures ETFs that have been previously approved by the SEC generate their prices based on the same indices as the spot Bitcoin ETF.

They stated that the SEC could not rationally conclude that Bitcoin Futures ETFs do not take on “the very same risks in the very same market” as the spot Bitcoin ETF, adding:

“Although Bitcoin may be a relatively new asset, the legal issue here is straightforward. The Commission has violated the APA’s most basic requirements by failing to justify its vastly different treatment of Bitcoin Futures ETPs and spot Bitcoin ETPs.”

Grayscale also argued that the SEC’s “significant-market test” — one which assesses whether an exchange’s proposal to list an ETP is “designed to prevent fraudulent and manipulative acts and practices” – is “flawed” and that the SEC “set the bar so high” that it couldn’t possibly be satisfied.

Attorneys for Grayscale also noted that this significant-market test only applies to Bitcoin-related ETPs — which led them to believe that they have been discriminated against.

Grayscale also argued the SEC’s decision “harms the 850,000 investors who own shares in the Trust”:

“Given that the Commission did not approve the Trust to trade as an ETP on the Exchange, the value of its shares cannot closely track the value of the Trust’s underlying Bitcoin assets— depriving Trust shareholders of billions of dollars in value.“

“There is simply no justification for continuing to inflict such serious investor harm,” the brief stated.

The filing in the U.S. Court of Appeals comes after the SEC officially denied Grayscale’s application to convert GBTC to a spot Bitcoin ETF on Jun. 29.

On the same day, Grayscale initiated litigation by filing a “Petition For Review.”

According to Grayscale, the SEC must submit its brief by Nov. 9. Grayscale will then submit a reply brief on Nov. 30 before both parties submit a final brief on Dec. 21.

Grayscale had $26.4 billion in assets under management (AUM) in Mar. 2022.

U.S. Court of Appeals