Bloomberg analysts improve Bitcoin ETF approval odds

Bloomberg analysts improve Bitcoin ETF approval odds

A Promising Outlook for Bitcoin ETFs in the US

The possibility of a spot Bitcoin exchange-traded fund (ETF) launching in the United States has received a boost, as analysts at Bloomberg Intelligence have raised their estimates for approval to 65% from 50%. This renewed optimism is fueled by a combination of factors within the cryptocurrency market and regulatory landscape.

In recent months, major financial institutions such as BlackRock, Fidelity, WisdomTree, and Valkyrie have filed applications for a spot Bitcoin ETF. These applications aim to make investing in Bitcoin more accessible to the general public. While previous attempts at securing approval from the Securities and Exchange Commission (SEC) have been unsuccessful, experts believe there is a higher likelihood of success this time around.

BlackRock, in particular, stands out due to its strong track record of ETF approvals. The asset management giant has rarely been denied an ETF application in the past, bolstering confidence in its current Bitcoin ETF filing. If BlackRock’s application is approved, it could pave the way for other institutions to enter the market.

Additionally, the recent behavior and statements from SEC Chairman Gary Gensler have generated optimism among cryptocurrency enthusiasts. In a Bloomberg interview, Gensler emphasized the presence of four other commissioners at the SEC, downplaying his own role. This departure from his usual approach suggests a potential shift in the SEC’s stance on cryptocurrencies. As the Chair holds significant influence within the commission, it would be noteworthy if the two other Democratic commissioners were to make a different decision regarding Bitcoin ETFs.

Furthermore, Coinbase, one of the leading cryptocurrency exchanges, received what appears to be an implicit approval from the SEC regarding its Bitcoin trading platform. CEO Brian Armstrong was advised to delist all cryptocurrencies except Bitcoin. This development suggests the SEC is more likely to be accommodating towards Bitcoin ETFs compared to other cryptocurrencies.

In addition to these positive indicators, the outcome of the SEC’s case against crypto asset manager Grayscale could also impact the approval of Bitcoin ETFs. If Grayscale wins its lawsuit against the SEC, it might lead the commission to approve all outstanding Bitcoin ETF applications. The connection between Grayscale and Digital Currency Group, the parent company of CoinDesk, adds another layer of significance to this potential catalyst.

However, it is important to note that there are still hurdles to overcome. Gensler has expressed concerns about the current state of crypto trading markets, emphasizing issues such as fraud, manipulation, and abuse. These concerns could potentially influence decision-making within the SEC, creating a more challenging environment for Bitcoin ETF approvals.

Overall, the landscape for Bitcoin ETFs in the US is showing positive signs. The increased probability of approval, driven by institutional applications, Gensler’s shifting stance, and the SEC’s reception of Coinbase’s Bitcoin trading platform, offers hope to those seeking increased access and legitimacy for cryptocurrencies. While challenges remain, such as Gensler’s reservations regarding crypto markets, the stage is set for a potential breakthrough.

Table: Major Factors Influencing the Outlook for Bitcoin ETFs in the US

Factors Impact on Bitcoin ETF Approval
Institutional applications (BlackRock, Fidelity, etc.) Increases likelihood
SEC Chairman Gary Gensler’s statements and behavior Suggest potential shift
Coinbase’s apparent approval by the SEC Favors Bitcoin ETFs
Potential outcome of SEC’s case against Grayscale Could influence decision
Gensler’s concerns about crypto trading markets Possible obstacle

Note: This article has been edited by Sheldon Reback.