According to the Bernstein Report, the Probability of Approval for Spot Bitcoin ETFs is High

  • Bernstein, a global asset management firm that provides investment management and research services to retail investors worldwide, has released its new research report.
  • As stated by analysts led by Gautam Chhugani, the SEC believes that a spot Bitcoin ETF would not be reliable.
  • According to the report, the industry is now proposing a surveillance agreement between a spot exchange operator and a regulated exchange such as Nasdaq.

Bernstein, a giant investment management firm that provides research services, criticized the inefficiency of GBTC in its latest report and reported that the likelihood of approval for spot Bitcoin ETFs is high.

Bernstein Releases New Research

alliance-bernstein

According to a research report published by Bernstein, a global asset management firm that provides investment management and research services to retail investors worldwide, despite the challenging stance of the U.S. Securities and Exchange Commission (SEC) towards spot Bitcoin (BTC) exchange-traded funds (ETFs), the probability of approval is quite high.

Bernstein states that the SEC has already allowed futures-based Bitcoin ETFs and recently approved leveraged futures-based ETFs with the principle that futures prices come from a regulated exchange such as CME. As stated by analysts led by Gautam Chhugani, the SEC believes that a spot Bitcoin ETF would not be reliable because “spot exchanges (such as Coinbase) are not regulated, and therefore spot prices are not reliable and susceptible to manipulation.”

Although the regulator has received many applications, it has not yet approved a spot Bitcoin ETF. Blackrock’s unit submitted application documents last month to create a spot Bitcoin ETF. This led other asset managers such as Invesco and Wisdom Tree to apply for a Bitcoin ETF product or reapply.

The report highlighted Grayscale’s attempt to convert Grayscale Bitcoin Trust (GBTC) into an ETF and stated that it is currently being discussed in an appeals court;

“The court does not seem convinced that the futures price is not derived from the spot price, so allowing a futures-based ETF and not allowing a spot-based ETF seems to be a difficult situation for the court to accept.”

In addition, according to the report, the industry is now proposing a surveillance agreement between a spot exchange operator and a regulated exchange such as Nasdaq.

Bernstein Highlights GBTC’s Illiquidity and Inefficiency

Bernstein stated that the absence of a spot Bitcoin ETF has led to the growth of over-the-counter products such as Grayscale Bitcoin Trust (GBTC), which are more expensive, illiquid, and inefficient. Grayscale is managed by Digital Currency Group (DCG). The report stated;

“Instead of dealing with a Grayscale over-the-counter product that fills the institutional void, the SEC would prefer to bring a regulated Bitcoin ETF directed more by mainstream Wall Street participants and supervised by existing regulated exchanges.”

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Lucien Renard
Lucien Renardhttps://en.coinotag.com/
Lucien Renard is a 24-year-old writer specializing in cryptocurrency analysis and price action. With a focus on technical analysis, Lucien provides valuable insights into market trends and potential opportunities for investors.
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