Undoubtedly, one of the key developments that investors are anxiously awaiting is the approval of an exchange-traded fund (ETF) on Bitcoin in the United States, and the forecasting is looking increasingly positive.
This coveted milestone could potentially open the door to more widespread adoption of Bitcoin as a legitimate asset class.
According to analysts at Bloomberg Intelligence, the chances of a spot Bitcoin ETF being launched in the United States this year have improved significantly, from 50% to an encouraging 65%.
Forecasting for Bitcoin ETF approval improves: analysts see 65% chance
The analysts, James Seyffart and Eric Balchunas, highlighted several recent developments that have helped make their forecasts more optimistic.
One of these is the apparent approval of Coinbase‘s Bitcoin trading platform by the US Securities and Exchange Commission (SEC).
This green light for Coinbase is seen as a positive sign for the broader cryptocurrency market, indicating that regulatory hurdles may be softening.
Another contributing factor is SEC Chairman Gary Gensler’s position on the issue.
In a recent interview, Gensler downplayed his role within the agency when asked about cryptocurrency issues, pointing out that there are four other commissioners involved in the decision-making process.
This change in tone and approach has drawn the attention of analysts, who interpret it as a potential sign that anti-cryptocurrency sentiment within the SEC may be losing political support and becoming untenable.
The involvement of major financial institutions in the rush to launch an ETF on Bitcoin also adds weight to the increased odds.
Companies such as BlackRock, Fidelity, WisdomTree, and Valkyrie have applied to create a spot Bitcoin ETF, and that of BlackRock is particularly interesting.
BlackRock has a solid track record of success with ETF applications, having rarely faced rejection in the past. This, combined with the growing mainstream interest in cryptocurrencies, further strengthens the chances of an ETF being approved.
SEC’s propensity for approval
Regarding the SEC’s potential willingness to approve a Bitcoin ETF, Seyffart and Balchunas noted that the SEC seems more inclined to yield to ETFs tied specifically to Bitcoin, compared to other cryptocurrencies.
The SEC’s apparent approval of Coinbase’s Bitcoin trading platform reinforces this idea. As a partner and custodian in a major surveillance sharing agreement, Coinbase is deeply involved in many of the current ETF filings, making it a crucial player in the process.
In addition, the ongoing lawsuit against cryptocurrency manager Grayscale could also play a role in shaping the regulatory landscape. Bloomberg predicts that the SEC will lose the case, which could have a catalytic effect on the approval of Bitcoin ETFs.
An SEC defeat could cause the agency to reconsider its position and potentially pave the way for more cryptocurrency-related investment products.
Although the path toward approval of a spot Bitcoin ETF in the United States remains uncertain, these recent developments have certainly strengthened the outlook. The revised estimates by analysts at 65% reflects the growing belief that the industry is getting closer to reaching this important milestone.
However, investors and stakeholders should remain cautiously optimistic, as regulatory decisions can be unpredictable and subject to change.
Conclusions
In conclusion, the increasing likelihood of the launch of a spot Bitcoin ETF in the United States this year, as predicted by Bloomberg analysts, represents a promising step forward for the cryptocurrency market.
Growing interest from major financial institutions, the apparent approval of Coinbase’s Bitcoin trading platform, and SEC Chairman Gary Gensler’s change of position all help to increase the likelihood of regulatory acceptance.
The potential approval of a Bitcoin ETF has immense significance for the broader adoption and legitimization of cryptocurrencies as a mainstream investment asset. It could pave the way for more widespread participation by retail and institutional investors, making it easier to gain exposure to Bitcoin without the complexities of direct ownership.
However, it is essential to temper optimism with caution, as regulatory decisions are subject to unpredictability and could take longer than expected.
The SEC has historically exercised caution in its approach to digital assets, prioritizing investor protection and market integrity. Therefore, investors and stakeholders must remain patient and vigilant as the industry moves through the regulatory landscape.Moving forward, industry players, regulators, and market participants must continue to work together to strike a balance between innovation and regulation. A well-regulated and transparent environment can foster healthy growth, encouraging further progress in the cryptocurrency space.
Source: https://en.cryptonomist.ch/2023/08/03/forecasting-etf-bitcoin/