Bloomberg Analyst Forecasts Bitcoin ETF Greenlights Expected in January; Ethereum Holds Exclusivity
In the latest episode of The Scoop podcast, Bloomberg Intelligence analysts James Seyffart and Eric Balchunas made a bold prediction regarding the Securities and Exchange Commission (SEC) approving a series of spot Bitcoin ETFs. According to Seyffart and Balchunas, there is a high likelihood that these approvals will take place between January 5-10.
This prediction aligns with the final deadline for the ARK and 21Shares application, which was initially filed in April. These firms are competing with other major players like BlackRock, who entered the field in June. A total of 12 firms are vying for approval.
Seyffart speculates that the SEC has deliberately delayed decisions in order to align multiple approvals simultaneously. This strategy ensures that no single firm gains an unfair advantage. He warns that if the SEC were to deny these applications, it would represent a significant shift in their approach.
The SEC’s reluctance to favor any particular firm in the cryptocurrency ETF arena reflects their commitment to maintaining neutrality and fairness. Seyffart believes that the SEC’s pattern of behavior, particularly observed during the approval of ether futures ETFs, indicates a likelihood of mass approval for Bitcoin spot ETFs.
The conversation also touched upon Grayscale Investments’ recent victory against the SEC, which could influence the approval of their Grayscale Bitcoin Trust (GBTC) product as a spot Bitcoin ETF. Seyffart notes that this case has put the SEC in a difficult position and may accelerate approvals.
However, the path for spot ether ETFs seems more complex due to the differences in market robustness and underlying technologies between Bitcoin and Ethereum. While Seyffart remains optimistic, he believes that approvals for ether spot ETFs are more likely towards the end of May 2024, albeit with less certainty compared to Bitcoin ETFs.
Seyffart also explains that after the SEC’s 19b-4 process approval, ETFs must have their S-1 prospectuses cleared by the SEC’s Corporate Finance division before trading can commence. This process could introduce delays, making it difficult to determine the precise timeline for the ETFs’ market debut.
In terms of market reception, Seyffart expects a cautious initial uptake due to the strict due diligence processes of major brokerages and banks. However, he predicts that BlackRock, with its strong industry relationships, may expedite the inclusion of these ETFs on various platforms.
Overall, Seyffart expresses confidence in the long-term success of these ETFs, projecting significant capital inflows driven by both hype and the strategic interests of major asset owners.
