SEC ‘backed into corner’ on BTC ETF approval – Bloomberg analyst

The United States Securities and Exchange Commission (SEC) is “backed into a corner” in approving bitcoin exchange-traded funds (ETFs), according to Bloomberg analyst James Seifert.

During a private webinar with CryptoQuant on January 4, he said the investment vehicle has a 90% chance of getting the green light next week, although challenges may still arise:

“The SEC must either come up with a new rationale. […] Because of all these reasons, these ETFs Courts say those reasons don't matter anymore, and now you're coming up with new reasons. […] I don't believe this is an option for the SEC. The other option is to get them out, in which case, again, I don't think that's possible because the SEC is backed into a corner here. I think they should approve.

Seifert's comments refer to the latest developments following BlackRock's listing of the BTC ETF in June. Since then, SEC officials have held dozens of meetings with asset managers approving, addressing concerns and demanding adjustments. In addition, the regulator is fighting a court battle in August to convert the oversubscribed Greyscale Bitcoin Trust (GBTC) into a listed BTC ETF from one of the competing greyscale firms.

The analyst also shared his thoughts on Matrixport's latest report on whether they might reject all the ideas. “We just don't agree completely, to be honest,” he explained, the concerns about the approval requirements or the role of Coinbase in the intelligence agreements have been addressed with the reforms made by asset managers in the past months.

The third possibility, which is nagging at the back of my mind, is that someone goes nuclear, just like Gary did, and I guess denial would go nuclear. […] I don't think that will happen either. This is a huge tail-end disaster event.”

A move in the coming days could bring $10 billion in revenue to Bitcoin ETFs in the first year, Seifert said. “I don't think we'll get more than $100 billion in the first year or two.[…] For reference, gold ETFs have about $100 billion in total in the US.

What's more, Seifert warned that widespread adoption could take weeks or even months as institutional investors do their due diligence before adding cryptocurrencies to their portfolios.

The analyst said, “Many large institutions, these warehouses, these platforms where brokers or advisors work, can't just buy what they want. There is like an approved list and an unconfirmed list.”

“[…] You must realize that these are the most sophisticated traders in the world […] Not when they click buy on Coinbase as a random person in their apartment. […] These sophisticated people are vulnerable.”

A final decision by the SEC is expected on January 10. Seifert expects to grant a joint permit to all applicants, noting that the grayscale change may require a few more days than other proposed funds.

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