BlackRock’s Bitcoin ETF: 50% Probability of Approval
Bloomberg’s senior ETF analyst Eric Balchunas has estimated that investment management firm BlackRock has a 50% probability of having its Bitcoin (BTC) Exchange Traded Fund (ETF) accepted.
Balchunas’ prognostication is a result of Elliott Stein, a senior litigation analyst for Bloomberg Intelligence, making an observation that the probability of Grayscale prevailing in its dispute with the SEC is estimated to be 70%.
Balchunas suggested that the SEC may be more likely to approve BlackRock’s ETF application as a way to “restore their reputation” by accepting an ETF from a “respected ‘established’ traditional financial” firm instead of Grayscale.
Grayscale’s Bitcoin ETF Lawsuit: 70% Probability of Success
Since Grayscale challenged the United States Securities Exchange Commission’s refusal of its application in June 2022, the two sides have exchanged legal documents and had three U.S. federal appellate court judges listen to oral testimony on March 7.
We are of the opinion that Grayscale has a 70% likelihood of succeeding in its lawsuit against the SEC concerning its attempt to transform the Grayscale Bitcoin Trust (GBTC) to a Bitcoin ETF.
Stein noted that following the completion of the oral arguments, Grayscale’s chances of success had risen to 40%, as “all three judges on the panel seemed to be favoring Grayscale,” based on their “questions,” Stein commented.
Stein stated that Bloomberg anticipates a resolution to be reached by August.
Applications for Bitcoin Exchange Traded Funds have been the focus of the industry lately, with Fidelity, Invesco, Wisdom Tree and Valkyrie joining BlackRock, a company managing $10 trillion in assets, in awaiting the SEC’s approval.
If the SEC eventually gives the green light to applications from major financial institutions such as JPMorgan, Morgan Stanley, Goldman Sachs, BNY Mellon and Bank of America to provide similar services, the digital asset market would be exposed to companies that collectively manage $27 trillion in assets.
Firms overseeing $27 trillion in assets are adopting crypto, according to CoinShares CSO.
As the outcome of Grayscale’s case hangs in the balance, GBTC has seen a 134% increase in the year 2023, reaching its highest price since May 13, 2022, as reported by Google Finance.
The discount rate of GBTC’s share price relative to its net-asset-value fell to 31% on June 26, the lowest level since September 12 of the previous year, as per data from YCharts. This lower discount rate implies that investor sentiment towards the product may be becoming more optimistic.
GBTC has suffered a decline of over 65% from its peak price of $56.70, similar to other cryptocurrencies in the market.
Magazine states that Bitcoin is heading towards achieving “Net Zero” goals.
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