Investment management firm BlackRock has a 50% chance of getting its spot Bitcoin (BTC) Exchange Traded Fund (ETF) approved, says Bloomberg’s senior ETF analyst Eric Balchunas.
Balchunas’ prediction comes following an observation made by Elliott Stein, a senior litigation analyst for Bloomberg Intelligence, who now pegs the chances of Grayscale winning its case against the SEC at 70%.
Balchunas explained that the SEC may look more favorably upon BlackRock's ETF filing as a way to “save face” by allowing an ETF from a “trusted 'adult' TradFi” firm instead of Grayscale.
Ever since Grayscale appealed the United States Securities Exchange Commission’s decision to reject its application in June 2022, the two parties have engaged in back and forth legal filings in addition to oral testimony heard by three U.S. federal appellate court judges on March 7.
“Grayscale has a 70% chance of winning its lawsuit against the SEC over the company’s bid to convert the Grayscale Bitcoin Trust (GBTC) to a Bitcoin ETF, we believe.”
Stein added that Grayscale’s odds increased from 40% after the parties’ oral arguments reached completion because “all three judges on the panel appeared to side with Grayscale,” based on their “lines of questioning,” Stein said.
Stein said Bloomberg expects a conclusion will be made by August.
Applications for Bitcoin ETFs have been a central focus point for the industry of late, with Fidelity, Invesco, Wisdom Tree and Valkyrie following $10 trillion asset management firm BlackRock in line for the SEC’s approval.
If the SEC eventually approves the applications from the likes of JPMorgan, Morgan Stanley, Goldman Sachs, BNY Mellon and Bank of America looking to offer similar services, the digital asset market would be exposed to firms with a combined $27 trillion in assets under management (AUM).
While the decision of Grayscale’s case awaits, GBTC has surged over 134% in 2023 to $19.47, which marks its highest price since about May 13, 2022, according to Google Finance.
Additionally, the discount of GBTC’s share price when compared to its overall net-asset-value dropped to 31% on June 26, the lowest level recorded since Sept. 12 last year, according to data from YCharts. A lower discount rate on the trust means that investors sentiment towards the product may be turning more positive.
GBTC Discount to Net Asset Value (NAV). Source: Ycharts.
However, like much of the crypto market, GBTC is down over 65%% from its all-time high price of $56.70.