Bloomberg analysts estimate 75% chance of a spot bitcoin ETF in 2023

Quick Take

  • Grayscale’s court win and decisive ruling have increased the likelihood of a spot bitcoin ETF in 2023, according to Bloomberg analysts.
  • The SEC’s legal and PR setbacks may make further denials of such ETFs politically challenging, though the upcoming September decisions will likely be delayed.

Following Grayscale's legal victory against the Securities and Exchange Commission (SEC) yesterday, Bloomberg ETF analysts James Seyffart and Eric Balchunas have updated their estimate regarding the launch of a spot bitcoin ETF product.

The analysts now estimate a 75% probability of a spot bitcoin ETF launching in 2023, with it being almost a "done deal" by the end of 2024.

"James Seyffart and I are upping our odds to 75% of spot bitcoin ETFs launching this year (95% by end of 2024). While we factored Grayscale win into our previous 65% odds, the unanimity and decisiveness of ruling was beyond expectations and leaves the SEC with very little wiggle room," Balchunas said in a post on X (formerly Twitter).

"A lot of people were asking yesterday. Eric and I have moved to 75% for a 2023 launch of a spot bitcoin ETF and we think it’s almost a done deal that we will have one launched by the end of 2024," Seyffart confirmed.

"We think the legal and PR loss will combine to make denial politically untenable," Balchunas added.

Pending spot bitcoin ETF deadlines

Deadlines for the SEC’s decision to approve, reject or delay applications from BlackRock, Bitwise, VanEck, WisdomTree, Invesco, Fidelity and Valkyrie fall from Sept. 1 to Sept. 4. However, the analysts expect delays.

"We will not be surprised if the SEC delays given the ruling just happened. That said, I'm not sure timelines will matter as much in this situation. Probably more likely we wake up one day and hear SEC has given in, and a launch is imminent," Balchunas said.

"We're expecting delay orders this week on a bunch of the applications. We see approvals as highly unlikely so soon after the court decision," Seyffart added.

Grayscale’s win

Yesterday, a court gave Grayscale Investments a win in its case against the SEC over its application for a spot bitcoin ETF in a decision that could have broader implications for such spot bitcoin ETF applications.

Bitcoin's value surged by 5.4% to $27,450 immediately following the court's decision, as the GBTC discount to net asset value narrowed from -25% to -17%.

The court criticized the SEC's inconsistent treatment between spot and futures-based bitcoin ETFs — with Grayscale's proposed bitcoin ETF similar to already approved bitcoin futures ETFs in both the underlying assets and in surveillance sharing agreements — stating the agency's denial of Grayscale's proposal was "arbitrary and capricious."

The SEC has 45 days to request a rehearing. Beyond this period, the court will issue a final mandate and further directives.

The SEC can now either approve the conversion of GBTC into an ETF, deny it for some other reason or force the closure of existing futures-based bitcoin ETFs, The ETF Store President Nathan Geraci said following the decision.


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