Bitcoin ETF Potential Brightens

Bloomberg analysts Eric Balchunas and James Seyffart have recalibrated their predictions, placing the likelihood of a Bitcoin ETF approval at an encouraging 75% by the end of this year. This noteworthy shift comes on the heels of a recent legal victory by Grayscale against the SEC, a development that has cast a positive light on the prospect of ETF approval.

In an August 29 decision, the DC circuit court ruled that the SEC had unlawfully blocked Grayscale's Bitcoin ETF application, questioning the Commission's reasoning. This triumph for Grayscale has instigated a wave of optimism regarding the potential for Bitcoin ETF approval. 

As a result of the court's decision, the analysts raised their approval prediction from 65% to 75%, reflecting their increasing confidence in the likelihood of achieving the milestone within a year.

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The Upcoming SEC Decision and Its Implications

While the excitement surrounding potential ETF approval builds, the SEC's decision on several spot Bitcoin ETF applications is due imminently. Many anticipate that the proximity of these applications to the Grayscale court ruling might result in further delays.

The landscape became more intriguing, with multiple ETF applications emerging shortly after BlackRock's submission. These applications were subsequently added to the federal register around the same time, with a review period set to conclude in the second week of January 2024.

During the 240-day review window, the SEC must make decisions by specific deadlines, typically occurring every 45, 60, and 90 days. The SEC has three options: to approve the ETF, reject it, or extend the review period. As the initial deadline approaches on September 2, it's anticipated that the SEC might issue "delay orders" this week, considering the potential complexities arising from the recent court decision.

James Seyffart noted that the court's decision effectively rebuked the SEC's previous denial orders for spot Bitcoin ETFs. According to Seyffart, the court's judgment leaves little room for the SEC to operate, creating an intriguing situation for it going forward with Bitcoin ETF.