Investment management firm BlackRock has a 50 percent chance of getting its Bitcoin (BTC) exchange-traded fund (ETF) approved, according to Eric Balchunas, senior ETF analyst at Bloomberg.
Balchunas’ forecast is based on an observation by Elliott Stein, a senior litigation analyst at Bloomberg Intelligence, who now puts the odds of Grayscale winning its case against the SEC at 70%.
Balchunas explained that by allowing an ETF from a “trustworthy “mature” TradFi” company instead of Grayscale, the SEC might be more sympathetic to BlackRock’s ETF filing as an opportunity to “save face.”
Since Grayscale appealed the US Securities Exchange Commission’s decision to deny her application in June 2022, the two parties have appealed in addition to oral testimony from three US Circuit Court judges on March 7 and made legal requests.
“We believe Grayscale has a 70 percent chance of winning its lawsuit against the SEC over the company’s bid to convert the Grayscale Bitcoin Trust (GBTC) into a Bitcoin ETF.”
Stein added that after the parties’ hearings concluded, Grayscale’s odds increased by 40% because “all three judges on the panel appeared to align with Grayscale based on their ‘lines of inquiry,'” Stein said.
Stein said Bloomberg expects a conclusion to be reached by August.
Bitcoin ETF applications have been the focus of the industry lately. Fidelity, Invesco, Wisdom Tree and Valkyrie followed the $10 trillion asset management firm BlackRock, which is awaiting SEC approval.
Should the SEC eventually approve the applications of companies like JPMorgan, Morgan Stanley, Goldman Sachs, BNY Mellon, and Bank of America that want to offer similar services, the digital asset market would be exposed to companies with combined assets under management of $27 trillion .
Related: Companies managing $27 trillion in assets turn to crypto: CoinShares CSO
While the Grayscale case is pending, GBTC is up over 134% in 2023 to $19.47, according to Google Finance, marking its highest price since around May 13, 2022.
In addition, the discount in GBTC’s stock price to total net asset value fell to 31% on June 26, the lowest since September 12 last year, according to data from YCharts. A lower discount rate for the trust means investor sentiment towards the product may become more positive.
GBTC discount to net asset value (NAV). Source: Ycharts.
However, like much of the crypto market, GBTC is down more than 65% from its all-time high price of $56.70.
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