Bernstein Says Spot Bitcoin ETF Approval By SEC Is ‘Fairly High’

July 3, 2023 2:42 pm Comments

There is always a first time for everything and it looks like many industry experts are now saying that the approval of the first spot Bitcoin ETF may be coming soon.

Brokerage firm Bernstein recently stated that it predicts the the probably of a spot Bitcoin ETF approval by the SEC to be fairly high.

This is giving a lot of investors more confidence about the end result as the SEC could finally be loosening its grip when it comes to digital asset ETFs.

Bernstein specifically pointed out that futures and leveraged based BTC ETFs have already been approved and the only reason why spot ETFs have not been approved is because exchanges like Coinbase are not under its regulation.

However, it seems that there has recently been a way that was discovered to get around this legal obstacle which is why many are filing for spot ETFs now. reports:

However, the agency is skeptical when it comes to a spot BTC ETF because “spot exchanges [like Coinbase] are not under its regulation, and thus spot prices are not reliable and prone to manipulation.”

However, there’s a loophole. Analysts led by Gautam Chhugani wrote,
“The court did not sound convinced that the futures price is not derived from the spot price, and thus to allow a futures-based ETF and not allow spot sounds like a difficult pill to swallow for the courts.”

In fact, the report further underlined how the industry has now proposed a surveillance agreement between the spot exchange operator and regulated exchanges like Nasdaq.

Other expensive, illiquid, and inefficient OTC products like Grayscale’s GBTC are currently trying to fill in the shoes of a spot BTC ETF.

Since no spot Bitcoin ETFs have yet been approved, many investors are relying on over the counter products such as the Grayscale Bitcoin Trust (GTBC) which is a more expensive alternative product that investors could use.

The downside is that it is not as liquid which makes it a barrier for large insitutions to easily get exposure to the crypto financial markets.

As a result, this may now make sense on why the SEC must eventually approve a spot Bitcoin ETF in order to appease Wall Street participants.

When this happens, it is possible that this could be the catalyst for a new bull run for the crypto industry as new capital will start to flow in.

CoinDesk concludes:

The regulator has yet to approve a spot bitcoin ETF despite receiving numerous applications. A unit of Blackrock filed paperwork last month for the formation of a spot bitcoin ETF.

This prompted other asset managers such as Invesco and Wisdom Tree to apply or reapply for a bitcoin ETF product.

“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,” the report said.

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