Spot Bitcoin ETF Could Be Rejected If SEC Wants ‘More Time’ – Analyst

While the odds are slim, a bitcoin exchange-traded fund (ETF) rejection this month is because the Securities and Exchange Commission wants “more time” than an outright rejection, according to Bloomberg ETF analyst Eric Balchunas. .

Speaking to Cointelegraph, Balchunas said that while he and FF analyst James Seyfart maintain a 90% chance of approval through January 10, they haven't raised their odds beyond that number because of that concern.

“If we don't see it in the next two weeks, I'd say it's more because they need more time.”

“We didn't go over 90% because that could happen. […] I don't think we'll see complete denial,” said Balchunas, adding that the 10 percent chance includes both scenarios.

New research note from me today. We still believe a 90% chance of spot #Bitcoin ETF approvals by January 10th. But if it comes early, we're entering a window where there *could* be a wave of approval for all current applicants pic.twitter.com/u6dBva1ytD

— James Seyff (@JSeyff) November 8, 2023

However, Balchunas said the amount of time and effort put in by the SEC and Bitcoin ETF issuers means it's unlikely that a Bitcoin ETF will be rejected at the last minute.

“This is going to be a decade of carpet pulling.”

“Everybody has done a lot of work in this, especially on holidays. Sadistic may not be enough for this word.

Vettel Lunde, an analyst at crypto research firm K33 Research, offered a similar view to Balchunas, but in a Jan. 2 market report, he pegged the ETF rejection probability at just 5 percent.

Meanwhile, Balchunas believes that if the SEC rejects it outright, funders could follow in the footsteps of crypto asset manager Grayscale and file a separate lawsuit against the regulator.

“People have spent so much money and put so much effort into giving up now. So yeah, it's not going to end. I don't think there's even going to be a cooling off period at this point. I think there's going to be hell,” Balchunas said.

Related: Greyscale's Latest Spot Bitcoin ETF Update Omits Authorized Participants

Public comments continue to solicit feedback from the SEC, starting on January 2 when the two ETFs were asked to be rejected outright.

The latest letter said Bitcoin's decentralized nature and ability to bypass traditional financial channels “makes it attractive to authoritarian regimes seeking to evade sanctions and exert greater control over their citizens.”

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