Bloomberg analysts Eric Balchunas and James Seyffart stated that after Grayscale’s recent victory against Bitcoin, the chance of the Securities and Exchange Commission (SEC) approving a Bitcoin spot exchange-traded fund (ETF) this year has increased to 75%.
This situation represents a 10% jump from the previous 65% probability that analysts had determined for the approval of a spot Bitcoin ETF. Balchunas stated that they expect Grayscale to win the lawsuit against the SEC, but they do not expect the company to make a decision that would give the SEC “very little room to maneuver.” The analysts also highlighted the image crisis caused by the loss for the SEC. An expert stated the following:
Beyond the legal loss, there is also a PR loss (which is important because it shapes the narratives and changes opinions). And this has been widely covered in mainstream media… We believe that the combination of legal and public relations losses will make the denial of it politically indefensible.
Yesterday, Grayscale made a significant decision that overturned the SEC’s reluctance to approve the conversion of the Bitcoin Trust into an ETF. The court decided that the financial regulator had acted arbitrarily in rejecting the company’s application and ordered a review of the application.
Following the news, the price of Bitcoin and the broader crypto market recovered after several weeks of limited volatility. However, according to CryptoSlate’s data, BTC has fallen by about 2.9% to around $27,000 in the last 24 hours, and the rally seems to have cooled off. The SEC may delay pending applications.
Meanwhile, Bloomberg experts believe that the SEC could further delay the applications as it evaluates the next steps after the decision. An expert stated the following:
We expect delay orders for many applications this week. We see that approvals are not very likely right after the court decision.
The analyst also predicted that even if the SEC were to reject all applications, the application by Hashdex for exposure to spot Bitcoin in DeFi could be more difficult to reject due to its unique and innovative approach.
Other experts suggested that while this victory may be good for other companies applying for a Bitcoin ETF, it could be detrimental to Grayscale. Bloomberg’s litigation analyst Elliot Stein stated that if the SEC wants to be vindictive, it could approve other applications and appeal the final decision in favor of Grayscale.