BlackRock Has 50:50 Chance of SEC Bitcoin ETF Approval

Updated: 28 June 2023

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Following the Bitcoin spot exchange-traded fund (ETF) filing frenzy of the past week, market experts are now assessing the chances of the US Securities and Exchange Commission (SEC) giving a green light to the venture.

Bloomberg’s top analyst believes that asset management firm BlackRock has a 50% chance of getting what it wants.

Grayscale’s Chances Playing to BlackRock’s Success

In a June 27 tweet, Bloomberg’s senior market analyst Eric Balchunas tweeted that BlackRock has an even chance of getting its Bitcoin spot ETF filing approved by the US SEC.

Balchunas attributed the probability to insights from his colleague regarding Grayscale, another prominent asset management firm.

Another reason we give spot bitcoin ETF approval 50% chance is our senior legal analyst @NYCStein gives Grayscale a 70% chance of winning case against SEC, who could approve BlackRock's ETF as way to save face using trusted 'adult' TradFi cos & stick it to Grayscale via @JSeyff pic.twitter.com/pHydOcpuQo

— Eric Balchunas (@EricBalchunas) June 27, 2023

Serving as a senior litigation analyst for Bloomberg Intelligence, Elliot Stein stated that Grayscale’s legal battle with the SEC on its right to switch its Grayscale Bitcoin Trust (GBTC) to an ETF has a 70% success rate.

Stein mentioned that the odds significantly improved from 40% to 70% following oral arguments presented to a panel of three judges earlier this year.

In the events that unfolded, these federal judges seemed to lean towards the argument of Grayscale, thereby boosting their chances of a favorable ruling.

With such a high number, the SEC could be bracing itself for a significant loss, but the top agency is not going down without a fight.

Stein noted that the SEC could end up agreeing to a Bitcoin spot ETF around the time a ruling on its case with Grayscale will be made as a form of spite.

As a result, the regulatory agency, led by Gary Gensler, would prefer to collaborate with a “trusted” and established asset management firm like BlackRock.

This leads to the $10 trillion business standing at a major chance of getting its wishes in the coming weeks.

BREAKING 🚨 #BITCOIN

SEC may approve BlackRock #Bitcoin ETF before losing court case to Grayscale – Bloomberg pic.twitter.com/z8dZCfastY

— BITCOINLFG® (@bitcoinlfgo) June 27, 2023

BlackRock has been one of the company’s paying close attention to the digital asset market despite its CEO Larry Fink passing derogatory comments previously.

However, Fink’s mindset has shifted recently. He acknowledged that Bitcoin has seemingly caught the attention of many people.

According to him, BlackRock’s website saw 3,000 hits for monetary policy and 600,000 for Bitcoin.

$10 TRILLION Blackrock's CEO Larry Fink:
We got 3,000 hits on our website for monetary policy, and 600,000 hits on #Bitcoin

"Bitcoin has caught the imagination of many people…(they're) excited about it" pic.twitter.com/IfFcgAZS1g

— Bitcoin Archive (@BTC_Archive) June 23, 2023

This sudden change in narrative and the inflow of institutional investors into the crypto space led to a significant rally in the past week, with Bitcoin crossing the $30,000 threshold.

$27 Trillion in Assets Coming Into Crypto Market

An ETF provides a viable method for trading the price of an asset without the need to directly possess the physical commodity.

With a Bitcoin spot ETF, investors can trade the price of Bitcoin without the requirement of owning the asset itself or managing a cryptocurrency wallet.

Previously, the US SEC rejected several companies’ attempts to offer this service, citing reasons such as volatility and low liquidity.

However, the cryptocurrency market has experienced significant growth over the past two years, reaching a peak of over $3 trillion in value.

Now, many companies, including Fidelity, Ark Invest, Invesco, WisdomTree, and BlackRock, among others, are making renewed efforts to break through the SEC’s barriers with numerous filings.

1/ last week's @BlackRock spot Bitcoin ETF filing was big news!

but, it's not the only story. many of the largest financial institutions in the US are actively working to provide access to Bitcoin and more.

a quick glance – $27 trillion of client assets here! pic.twitter.com/azmHZmUL2a

— Meltem Demirors (@Melt_Dem) June 26, 2023

According to an online valuation, if the filings are all approved, the digital asset marketplace will see over $27 trillion in assets under management (AUM) poured into it.