This week, a window for the US Securities and Exchange Commission (SEC) to make a decision about several Bitcoin ETF applications is drawing closer.
According to an analyst for Bloomberg Intelligence, the likelihood of the securities regulator approving a spot Bitcoin ETF in this month has increased to 95%.
The odds
Eric Balchunas, Bloomberg Intelligence’s ETF analyst, said in a tweet on Saturday that the likelihood of the SEC rejecting the spot Bitcoin ETF applications at this point was just 5%.
This is a step up from the previous estimation from Bloomberg Intelligence, which had put the odds of a spot Bitcoin ETF approval in January at 90%.
Balchunas shared the insight in response to a tweet from another fellow analyst at Bloomberg Intelligence, James Seyffart.
He had been speculating on the ‘unlikely’ scenarios that could prompt the US securities regulator to reject the current group of applications.
These scenarios include Ark Invest withdrawing its application, assurances about deciding in March, or Gary Gensler, the SEC chair, coming up with new reasons to turn them down.
The analyst said that the SEC could also refuse to review the ETF bid from Grayscale despite a court order, even though it would lead them back to court.
Likewise, he also said that the Biden administration could also come up with a reason to put a stop to a spot Bitcoin ETF approval.
Window of opportunity
Participants in Polymarket, which is a crypto betting market, were more cautious about the approval of a spot Bitcoin ETF.
They have currently placed the odds of a spot Bitcoin ETF approval in January at 82%. Bloomberg had revealed that Bitcoin ETF hopefuls had been given until Monday to revise their applications.
There is an open window until January 10th for the SEC to approve multiple applications for a spot Bitcoin ETF simultaneously.
The first step in the process of approving a spot Bitcoin ETF would involve the SEC greenlighting the 19b-4 filings from exchanges that plan to list the ETFs.
All of these filings had been submitted by Friday. The spot Bitcoin ETF issuers’’ S-1 applications would then have to be approved by the SEC and trading could technically begin the next day.
More details
Last week, Balchunas said that they had heard that the SEC was working with the issuers on their 19B-4s.
He also added that they had been going back and forth on the drafts, which explained why the S-1 applications were being updated.
However, the edits to the 19B-4s had directly been given to the SEC and they had not been refiled. Thus, when they are refiled, it would show that the SEC has agreed.
He also added that if the regulatory body approves a Bitcoin ETF, then the first year could see the asset class reach a valuation of $10 billion.
But, some are still skeptical about the approval. Bitwise polled financial advisers last week and only 39% were confident about a Bitcoin ETF being approved this year.