In a recent development, analysts at asset manager Bernstein have predicted when the U.S. Securities and Exchange Commission (SEC) is likely to approve the first Spot Bitcoin ETF.
When will the first Spot Bitcoin ETF be approved?
According to the analysts, the pending Spot Bitcoin ETF applications could be approved early next year. They made this projection in line with the recent court ruling ruling in the Grayscale casewhich they believe could compel the SEC.
The court had ruled in favor of Grayscale in a case in which the asset manager argued that the Commission had acted arbitrarily and capriciously by not giving its Spot Bitcoin ETF application the same regulatory treatment as it accorded to Bitcoin futures ETFs. As part of its ruling, the court ordered the Commission to reassess the application.
Many saw this as a big win and proof that a Spot Bitcoin ETF was imminent, with Bloomberg analysts also weighing in and increasing the probability of these current funds, which will start this year, up to 75%. They stated that “the unanimity and decisiveness of [the] ruling was beyond expectations,” leaving the SEC with little or nothing to hold on to.
Bernstein’s analysts also seem to follow this view, as they noted that the SEC would simply take the “middle ground” and be more open to approving these ETFs rather than “coming up with another reason for denial” and to maintain the strict approach they have followed. taken so far about the crypto industry.
This projection also seems feasible because the SEC has to decide (approve or deny). ARK 21Shares Bitcoin ETF no later than January 10, 2024.
Given that the court rejected the primary reason why the SEC has continued to deny these applications, the Commission may have difficulty coming up with another compelling reason to deny the application.
Before then, the SEC is expected to make a decision on some pending applications in October. However, the Commission may postpone its decision on this matter again.
ETFs are an integral part of the crypto asset management industry
Bernstein analysts also predict that the crypto asset management industry will grow from its current level (between $45 to $50 billion) to more than $500 billion in the next five years. These ETFs, which they expect could be launched early next year, are among the factors they believe could drive such growth.
According to them, there will be an increasing demand from institutional investors for crypto assets, and funds such as a Spot Bitcoin ETF will be their preferred option. A Spot Bitcoin ETF allows these investors to invest directly in the flagship cryptocurrency in a regulated manner.
In line with this, they expect the ETFs to hold 10% of the market cap of Bitcoin and Ethereum and “5-6% of the share for liquid crypto hedge funds.”
BTC price sitting above $26,000 | Source: BTCUSD on Tradingview.com
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