Asset Manager $650 Billion Bernstein believes there is a good chance of a spot Bitcoin ETF getting approved by the SEC. The regulator’s argument of denying a spot ETF while approving futures ETFs is unlikely to convince the court in the Grayscale SEC case.
On July 2, Gemini co-founder Cameron Winklevoss tweeted the 10th anniversary of the Winklevoss Twins taking the top spot Bitcoin ETF. Although the SEC has denied multiple proposals, a scenario that continues even as the crypto market’s outlook shifts to an optimistic one, major Wall Street firms such as BlackRock, Fidelity, and Invesco have expressed an interest in entering the market.
The latest optimist in the opinion of a commercial Bitcoin ETF is a brokerage company Bernstein, as CoinDesk reported today. According to experts at the firm, who shared their insights in a research report, the SEC’s approval of futures Bitcoin ETFs as well as the leveraged ETF that was approved last week gives the regulator little room to maneuver in order to continue to deny the spot ETF.
The SEC’s contention that futures pricing is from regulated exchanges such as the CME, as opposed to spot prices that come from crypto exchanges like Coinbase, remains. However, when major asset management companies signal their intention to enter into market surveillance agreements in order to combat possible manipulations, it puts the SEC on the spot.
Grayscale’s case against the SEC, which relates to the regulator’s disapproval of a proposal to convert the Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF is a second reason that approval is likely. Analysts at Bernstein have stated that the court will not be able to be convinced that the futures price is not derived from the spot price. They believe that it would be better to allow futures ETFs while not disapproving the spot ones, as they say it would be a difficult pill to swallow for the court.
The research report summarises the outlook in this way: “SEC would rather bring in a regulated bitcoin ETF led by more mainstream Wall Street participants and with surveillance from existing regulated exchanges, than having to deal with a Grayscale OTC product filling the institutional gap.”
Market experts see the SEC’s recent quick feedback on recently filed proposals, which has seen Cboe BZX refiles spot ETFs for a number of firms such as Coinbase, as a positive step. Nasdaq has also refiled BlackRock’s ETF proposal, naming Coinbase as the crypto exchange with whom they have a sharing of surveillance agreement.
Overall, analysts at Bernstein believe the SEC is likely to approve a spot ETF by a regulated Wall Street participant. This, together with the approval of futures ETFs, provides a good opportunity for the crypto market to continue its positive shift.
