In a recent episode of The Scoop podcast, Bloomberg Intelligence analysts James Seyffart and Eric Balchunas predict that there is a high probability that the SEC will approve a number of spot Bitcoin ETFs between January 5th and January 10th.
Seyffart and Balchunas' forecast is in line with the final deadline for the ARK and 21Shares application, originally filed in April, putting it ahead of other major players such as BlackRock in June in a competitive field of 12 companies.
Seyffart speculates that the Securities and Exchange Commission (SEC) strategically delayed decisions, perhaps to accommodate multiple approvals at once. This approach would prevent any single company from gaining an unfair advantage. Seyffart warns that if the SEC rejects these applications, it would represent a significant change in its approach, similar to a “go nuclear.”
🚨BREAKING🚨
SEC holds another meeting with BlackRock
to discuss his spot #Bitcoin ETF.
According to Bloomberg Intelligence analyst James Seyffart, the window for spot ETF approval is January 5-10, 2024.
And the market is expecting ETF approval as early as next month.
— Ash Crypto (@Ashcryptoreal) December 15, 2023
The SEC’s reluctance to play the role of kingmaker in the cryptocurrency ETF space reflects its efforts to maintain neutrality and fairness. Seyffart, citing various sources, believes that the SEC's pattern of behavior, particularly observed when approving Ether futures ETFs earlier this year, points to the likelihood of mass approval of Bitcoin spot ETFs.
The conversation also touched on Grayscale Investments' victory against the SEC, which could impact the approval of its Grayscale Bitcoin Trust (GBTC) product as a spot Bitcoin ETF. Seyffart notes that this case has put the SEC in a corner, potentially speeding up approvals.
However, the path for spot Ether ETFs appears to be more complex given the differences in market strength and underlying technologies between Bitcoin (BTC) and Ethereum (ETH). While Seyffart is optimistic, he believes approvals for Ether spot ETFs are more likely towards the end of May 2024, although with less certainty compared to Bitcoin ETFs.
Seyffart also explains that once the SEC approves the 19b-4 process, ETFs “must have their S-1 prospectuses approved by the SEC's Corporate Finance Division before trading can begin.” This process could cause delays and increase uncertainty about an exact timeline for the ETFs' market debut.
Due to the strict due diligence processes of major brokerage firms and banks, Seyffart expects market acceptance to be cautious at first. However, he predicts that BlackRock could accelerate the adoption of these ETFs on various platforms given its strong industry relationships.
Nice find here: Gensler's staff met with BlackRock yesterday to talk about $IBTC, but it wasn't a normal team, but more people from public policy, including BlackRock's public policy director Ben Tecmire, who, by the way, used to be senior counsel in the department for Investment Management from the SEC was https://t.co/bMePGpOufK
— Eric Balchunas (@EricBalchunas) December 15, 2023
Seyffart expressed confidence in the long-term success of these ETFs and predicted significant capital inflows driven by both the hype and the strategic interests of large asset owners.
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