Can Bitcoin ETF Still Be Rejected?

Amid a climate of heightened anticipation for the approval of a Bitcoin exchange-traded fund (ETF), a sliver of uncertainty persists.

Bloomberg’s Eric Balchunas has pointed to a 5% chance of rejection by the U.S. Securities and Exchange Commission (SEC).

The crypto market, known for its volatility, is reacting nervously to these possibilities, with recent price actions showing the gravity of the upcoming SEC decision.

Main scenarios of rejection

The scenarios leading to a rejection of Bitcoin ETF proposals are diverse but considered unlikely by market experts. The first scenario involves Ark Investment Management withdrawing their proposal with hopes pinned on a positive outcome in March, a move considered improbable given their commitment to the process. Another scenario could see the SEC denying the proposals using new reasons or sidestepping a court’s decision, potentially leading to further legal tangles.

These scenarios, while not expected, are part of the nuanced risk assessment that seasoned investors and analysts are considering as the decision date looms.

The mere possibility of a Bitcoin ETF rejection recently sent ripples through the cryptocurrency market, with Bitcoin’s price taking a sudden downturn to the sub-$41,000 level.

BlackRock is almost ready

Meanwhile, a recent report from Fox Business relayed BlackRock’s expectations that the SEC is poised to green-light their application for a spot Bitcoin ETF in the coming week.

Jane Street and JPMorgan were recently revealed as the broker-dealers ready to manage the cash flow for BlackRock’s ETF, pending regulatory approval.