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Two analysts from Bloomberg specializing in exchange-traded funds (ETFs), Eric Balchunas and James Seyffart, have estimated a 75% likelihood that the United States will see a spot Bitcoin ETF by the conclusion of 2023, following Grayscale’s legal victory against the US Securities and Exchange Commission (SEC).
Although the SEC has authorized futures-based Bitcoin ETFs, it has yet to approve any applications for spot Bitcoin ETFs.
Is a Spot Bitcoin ETF on the Horizon for the US in 2023?
Eric Balchunas and fellow Bloomberg ETF analyst James Seyffart have raised their forecast regarding the potential launch of a spot Bitcoin ETF in the US, asserting that there is a 75% chance that American cryptocurrency investors will witness the introduction of the nation’s first spot BTC ETF in 2023. Both experts in ETFs also contend that it is “almost a done deal” that such a product will debut by the end of 2024.
“While we factored Grayscale win into our previous 65% odds, the unanimity & decisiveness of ruling was beyond expectations and leaves SEC with “very little wiggle room.”
The optimistic outlook shared by Balchunas and Seyffart follows Grayscale’s significant triumph over the SEC, as the US Court of Appeals for the District Court of Columbia Circuit overturned the Commission’s decision to reject the asset manager’s request to convert its GBTC into an ETF.
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In October 2021, Grayscale submitted a proposal to the SEC to transform GBTC into a spot Bitcoin ETF, which the agency declined, citing insufficient measures to prevent fraud and market manipulation.
Grayscale responded to this rejection by filing a lawsuit, claiming that the regulator was exhibiting bias by approving Bitcoin futures ETFs while denying spot BTC ETFs. The court’s ruling characterized the SEC’s dismissal of Grayscale’s application as “arbitrary and capricious.”
Analysts Anticipate SEC to Postpone Spot BTC ETF Decision
While the ruling does not guarantee that the SEC will approve Grayscale’s application, there are optimistic expectations for a spot Bitcoin ETF approval occurring soon. Presently, several applications are pending the SEC’s decision early in September, including those from Bitwise, BlackRock, WisdomTree, Invesco, and VanECK.
Bloomberg Intelligence previously forecasted that a spot Bitcoin ETF could be launched before September 4. However, Balchunas indicated that it would not be surprising if the SEC postponed its decision in light of the recent court ruling, but he added that approval could occur at any moment.
Balchunas also pointed out that the SEC experienced a public relations setback in addition to its legal loss, suggesting that the unanimous victory for Grayscale received extensive coverage in mainstream media from major outlets such as the Wall Street Journal, CNN, and the New York Times. Both ETF analysts believe that the SEC’s public relations and legal defeats “will make denial politically untenable.”
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