When Can We Expect Approval for Spot Bitcoin ETFs in the US? Can the SEC Continue to Resist?

• Analysts at Bernstein have made predictions regarding when the US Securities and Exchange Commission (SEC) is likely to approve the first spot Bitcoin ETF.
• The court may find it challenging to identify a more compelling reason to continue rejecting these applications, thus invalidating the primary reason behind the SEC’s ongoing rejections.
• It appears that analysts at Bernstein are also leaning toward this view, believing that the SEC will now be more open to approving ETFs and will take a “middle path” that doesn’t deviate from their strict approach to the crypto industry thus far.

All eyes are on the October decisions regarding spot Bitcoin ETFs, but some analysts believe that ETFs may not receive approval in October: So when will they be approved?

Bernstein Provides a Prediction for ETF Approvals

According to recent developments, analysts at the asset management company Bernstein have predicted when the US Securities and Exchange Commission (SEC) is likely to approve the first spot Bitcoin ETF.

According to analysts, pending spot Bitcoin ETF applications could be approved in early next year. They made this projection based on the recent court decision in the Grayscale case, which they believe may put pressure on the SEC.

In the Grayscale case, the court ruled in favor of Grayscale, claiming that the asset manager had acted arbitrarily and capriciously by not giving the same regulatory treatment to the Spot Bitcoin ETF application as it did to Bitcoin futures ETFs. As part of the decision, the court ordered the Commission to reconsider the application.

Many saw this as a significant victory and evidence that the approval of Spot Bitcoin ETFs is imminent, with Bloomberg analysts increasing the likelihood of these pending funds starting this year to 75%. They said, “The decisiveness and unanimity of the decision exceeded expectations,” and they noted that the SEC doesn’t have much to hold onto.

Analysts at Bernstein seem to share this view because they believe that the SEC will now be more open to approving ETFs and will take a “middle path” that doesn’t deviate from their strict approach to the crypto industry thus far.

This projection also seems possible because the SEC is expected to make a decision on the ARK 21Shares Bitcoin ETF by January 10, 2024. The court may find it challenging to identify a more compelling reason that invalidates the primary reason behind the SEC’s continued rejection of these applications. Before this date, the SEC is expected to make decisions on some pending applications in October. However, the Commission could once again postpone its decision

ETFs are an Integral Part of the Crypto Asset Management Industry

Bernstein’s analysts also expect the crypto asset management industry’s current level (between $45 billion and $50 billion) to exceed $500 billion over the next five years. They believe that ETFs, including Spot Bitcoin ETFs that they predict may begin early next year, will be part of the factors that lead to this growth.

According to them, there will be increased demand for crypto assets among institutional investors, and funds like Spot Bitcoin ETFs will be the preferred choice for them. A Spot Bitcoin ETF would allow these investors to directly invest in the leading cryptocurrency in a regulated manner.

In this context, they expect ETFs to hold around 10% of Bitcoin and Ethereum’s market capitalization and about 5-6% for “liquid crypto hedge funds.