KEY POINTS
- The SEC is required to make a statutory decision on the spot Bitcoin ETF application of ARK Invest and 21 Shares on Wednesday
- An ETF analyst said the chance that SEC will reject spot Bitcoin ETF applications is now at 5%
- His gained confidence in Bitcoin ETF approval after another ETF analyst outlined three possible scenarios in the event that the SEC rejects the proposals
With the U.S. Securities and Exchange Commission's deadline to decide on the spot Bitcoin exchange-traded fund (ETF) application of ARK Invest and 21 Shares just a couple of days away, Bloomberg Intelligence senior ETF analyst Eric Balchunas has shared that the chance of the financial regulator rejecting the proposals is now at 5%.
The SEC is required to make a statutory decision on the spot Bitcoin ETF application of ARK Invest and 21 Shares on Wednesday, Jan. 10. However, industry watchers and experts anticipate that the agency will not approve a single application but instead make a series of approvals on or after that deadline.
Interestingly, Balchunas said over the weekend that the chance SEC will reject the Bitcoin ETF proposals is down to 5% from 10%. "I probably go with 5% at this point. But you gotta leave a little window open for these things," he said.
Balchunas' upgraded confidence in Bitcoin ETF approval followed fellow Bloomberg Intelligence ETF analyst James Seyffart's post on X outlining possible scenarios in the event that the SEC rejects the proposals. The scenarios included ARK withdrawing its application, regulatory pushback or an intervention by the Biden administration.
Seyffart shared these scenarios after a user on the social media platform asked, "You say is 90% sure an ETF, can you explain to all of us what will happen, is the 10% plays out? What happens to ARK?"
In response, the ETF analyst noted, "Good question. 1) Ark withdraws with assurances about March (unlikely) 2) Genz goes nuclear & SEC denies using new reasons or ignores the court knowing they'd end up back in court (again--Unlikely) 3) Biden admin comes down and does something to stop this (unlikely)."
Well said although I probably go with 5% at this point. But you gotta leave a little window open for these things.
— Eric Balchunas (@EricBalchunas) January 6, 2024
Aside from industry experts sharing their forecasts on the possibility of the SEC approving or rejecting spot Bitcoin ETF proposals, the crypto community is also betting on it using Polymarket, a decentralized prediction platform where users speculate on outcomes of various events.
The wager on whether Bitcoin ETF will be "approved by Jan. 15" has so far accumulated $1 million in bets from hundreds of users on the platform, with "yes" receiving more than 83% of the total votes.
This aligns with the 90% chance previously predicted by Balchunas and Seyyfart since October 2023, which was then increased following the landmark victory of Grayscale Investments against the SEC on the conversion of GBTC into an ETF.
"People asking me if we changed odds. No, we still holding line at 90% odds of approval by Jan 10 (aka this cycle), the same odds we've had for months (before it was cool/safe)," Balchunas said in November. "What we watching for now: more amended/final filings to roll in and clarity on in-kind vs. cash creates."
