BlackRock has 50% chance of getting approval for spot Bitcoin ETF: analyst

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Investment management firm BlackRock has a 50% chance of getting approval for its Bitcoin (BTC) exchange-traded fund (ETF), according to Eric Balchunas, principal ETF analyst at Bloombergs.

Balchunas’ prediction follows an observation made by Elliott Stein, senior litigation analyst for Bloomberg Intelligence, who now puts a 70% chance that Grayscale will win its lawsuit against the SEC.

Balchunas explained that the SEC may view BlackRock’s ETF filing more favorably as a way to save face by allowing an ETF from a trusted “mature” TradFi company instead of Grayscale.

Since Grayscale appealed the U.S. Securities Exchange Commissions decision to deny its request in June 2022, both parties have engaged in back and forth legal filings in addition to oral testimony heard by three judges of the US Federal Court of Appeals on March 7.

We believe Grayscale has a 70% chance of winning its lawsuit against the SEC over the company’s offer to convert the Grayscale Bitcoin Trust (GBTC) into a Bitcoin ETF.

Stein added that Grayscales’ odds jumped to 40% after the parties’ closing arguments, as the three judges on the panel appeared to side with Grayscale, based on their questions, Stein said.

Stein said Bloomberg expects a conclusion by August.

Bitcoin ETF applications have been a focal point for the industry lately, with Fidelity, Invesco, Wisdom Tree and Valkyrie posting $10 trillion asset management firm BlackRock online for approval of the DRY.

If the SEC eventually approves applications from JPMorgan, Morgan Stanley, Goldman Sachs, BNY Mellon and Bank of America seeking to offer similar services, the digital asset market would be exposed to companies with a total of $27 trillion in value. assets under management (AUM).

Related: Companies managing $27 billion in assets are embracing crypto: CoinShares CSO

While the Grayscales case decision awaits, GBTC jumped more than 134% in 2023 to $19.47, marking its highest price since around May 13, 2022, according to Google Finance.

Additionally, GBTC’s stock price discount to its overall net asset value fell to 31% on June 26, the lowest level since September 12 of last year, according to data from YCharts. A lower discount rate on confidence means investor sentiment towards the product could become more positive.

GBTC net asset value (NAV) rebate. Source: Ycharts.

However, like much of the crypto market, GBTC is down over 65% from its all-time high of $56.70.

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