Spot Bitcoin ETF Has a Fairly High Probability of Gaining Approval in the US – Bernstein Analysts

In a recent report, analysts from brokerage firm Bernstein have expressed a belief that the chances of a spot Bitcoin ETF gaining approval in the United States is relatively high. 

The Bernstein analysts gave the statement while acknowledging the Securities and Exchange Commission’s (SEC) difficult stance on the matter.

Factor’s Supporting Analysts’ Claim

One of the key factors supporting the notion of a higher probability of approval is the SEC’s previous approval of futures-based Bitcoin ETFs.

Bernstein highlighted that the SEC has allowed these types of ETFs, which derive their value from Bitcoin futures contracts, based on the premise that the pricing of futures contracts comes from regulated exchanges such as the CME.

According to the analysts, these precedents and the evolving regulatory landscape suggest that the SEC may be increasingly open to exploring different types of investment products related to Bitcoin and other cryptocurrencies. However, the analysts led by Gautam Chhugani have highlighted the SEC’s concerns about the dependability of a spot Bitcoin ETF due to the lack of oversight over spot exchanges like Coinbase. 

The lack of oversight on spot exchanges, according to the SEC, may make it difficult to ensure that spot prices accurately reflect the true value of Bitcoin and are not subject to manipulation by bad actors.

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SEC Delays Spot BTC Approval

Despite multiple registrations by renowned financial companies including BlackRock, Invesco, Fidelity, and WisdomTree, the SEC has not indicated readiness to approve any spot Bitcoin ETF proposal in the near term. While the SEC’s approval of a spot Bitcoin ETF is eagerly anticipated by many, it remains uncertain when or if such approval will be recorded.

In addition to these developments, the report also highlights Grayscale’s attempt to convert its Grayscale Bitcoin Trust (GBTC) into an ETF. Currently, this application is before an Appeals court. 

Grayscale’s move to transition its Bitcoin investment vehicle into an ETF format is seen as a significant development in the space, as the conversion of GBTC into an ETF could provide investors with additional opportunities for exposure to Bitcoin Within a regulated framework.

However, analysts suggest that the court has been skeptical about the idea that futures prices are not derived from spot prices. They argue that allowing a futures-based ETF while prohibiting a spot-based ETF could present a challenge for the court.