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Sunday, February 25, 2024
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    SEC delaying spot bitcoin ETFs ‘not not possible,’ however unlikely: Balchunas

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    BuyBitcoinFiveMinute

    A Matrixport report claiming that the US Securities and Change Fee will “reject” spot bitcoin ETFs shocked the crypto world on Wednesday, previous an 8% drop within the value of bitcoin.

    “From a political perspective, there isn’t a purpose to approve a bitcoin spot ETF that will legitimize bitcoin instead retailer of worth,” the report claimed. Bitcoin has since rebounded barely to sit down 5% down over the previous day, now at $42,500.

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    Bloomberg Intelligence analyst Eric Balchunas advised Blockworks that, with none sourcing, this report doesn’t line up with what Bloomberg Intelligence has been reporting.

    “I’m not saying it’s not possible,” he mentioned. “However it will overturn so much.”

    Nonetheless, if there’s sourcing backing up the report, then it’s “an entire totally different ballgame.”

    Learn extra: Bitcoin falls 8% on anti-ETF information, analysts stay assured

    Matrixport didn’t instantly return requests for touch upon the sourcing of the report.

    The Matrixport report claims that the present management panel that will vote on a spot bitcoin ETF approval is “dominated by Democrats.”

    “SEC Chair Gensler just isn’t embracing crypto within the US, and it would even be a really lengthy shot to anticipate that he would vote to approve Bitcoin Spot ETFs,” head of analysis Markus Thielen wrote. “An ETF would definitely allow crypto total to take off, and based mostly on Gensler’s feedback in December 2023, he nonetheless sees this trade in want of extra stringent compliance.”

    Learn extra: Charges, seeds and APs: What we all know — and don’t know — concerning the deliberate bitcoin ETFs

    See also  Ferrari embraces crypto funds, companions with BitPay within the US

    The decision, which comes forward of the window of alternative predicted by each Balchunas and fellow Bloomberg Intelligence analyst James Seyffart, would have made extra sense within the fall, Balchunas added.

    Money creates a should for Bitcoin ETFs

    The analysts consider there’s a 90% probability that the SEC approves a number of the spot bitcoin ETFs within the days main as much as Jan. 10, which is Ark’s deadline. Ark initially filed for its personal bitcoin spot ETF in 2021, however was rejected. It refiled late final yr.

    “Is there some distant chance that higher, higher echelons of presidency step in and pull the plug on [the spot bitcoin ETFs]? I suppose. However it will overturn so much. It will…overturn plenty of reporting, plenty of effort, plenty of work and plenty of signaling from the workers.”

    Placing apart the amendments that the potential issuers have filed in current weeks, “the large deal right here is the Grayscale court docket ruling,” Balchunas mentioned. Pairing that with the work that the SEC and the companies have put into the proposals makes the probability of rejection small in his opinion.

    Again in August, a panel of judges handed Grayscale a court docket win over its software to transform Graycale Bitcoin Belief (GBTC) to an ETF. Whereas the judges solely ordered the SEC to re-examine the applying, the SEC notably didn’t file an enchantment to the ruling.

    Final week, Balchunas mentioned that the “SEC is able to approve spot bitcoin ETFs however provided that they’ve clear language round cash-only creations and have a signed settlement with a licensed participant.”

    See also  Bitcoin outpaces stablecoins in market cap progress

    BlackRock was the primary of a handful of proposals on Friday to file amendments to their S-1s itemizing licensed members.

    “Whereas we’ve seen frequent conferences between the ETF candidates and workers from the SEC, which resulted within the candidates refiling their functions, we consider all functions fall in need of a vital requirement that have to be met earlier than the SEC approves. This is perhaps fulfilled by Q2 2024, however we anticipate the SEC to reject all proposals in January,” the Matrixport report mentioned.

    Nonetheless, Balchunas mentioned that in a state of affairs the place the SEC says that there’s nonetheless one challenge holding up approval, then he would “name that extra of a delay.”

    “There was a state of affairs the place, if Ark had been to withdraw on the SEC’s request, then the subsequent deadline is March,” he mentioned. Nonetheless, Balchunas pegs this delay scenario “an extended shot.”

    Ark Make investments CEO Cathie Wooden mentioned that the “possibilities” of an approval from the SEC “have gone up,” although she additionally cautioned that “that is the SEC and we by no means know what may occur alongside the way in which.”

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