Currently, there is tension around the possible approval of a spot bitcoin (BTC) exchange-traded fund (ETF).
While the market is now expecting approval, there is still a chance that the US Securities and Exchange Commission (SEC) will decide to reject the applications. Bloomberg’s ETF experts also warn about this.
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Bitcoin ETF: 10% chance of rejection
Bloomberg’s ETF experts, Eric Balchunas and colleague James Seyffart, estimate the chance of approval to be very high.
They estimate that there is a 90% chance that the SEC will approve one or more applications for a spot bitcoin ETF within two weeks, and probably before January 10.
However, this is not without reservations, Balchunas warns. The analyst points to a 10% chance that the SEC will reject the applications and postpone the approval to a new round.
“If we don’t see it in the next two weeks, it’s probably because [SEC] needs more time,” Balchunas said CoinTelegraph.
The rejection no longer seems likely at this point. The SEC has regularly sat down with the asset managers who submitted the applications.
This has led to more frequent submission of adjustments to applications in recent months. Those do not appear to be the actions of a regulator that plans to reject the applications.
“This would be the rug pull of the decade”
Nevertheless, there is a chance of rejection. “This would be the rug pull of the decade,” says Balchunas.
He calls a potential rejection sadistic of the supervisor, given the amount of work that has been put in recently, including during the holidays.
If it does happen, Bulchunas expects the asset managers will file lawsuits against the SEC.
“People have invested too much money and effort to give up now. So yeah, it wouldn’t be over. I don’t think there would be a cooling off period this time. I think there will be hell,” said Bulchanas.
Grayscale, manager of the largest bitcoin fund in the world, wants to convert its fund into an ETF. That application was rejected by the SEC in the past, but Grayscale sued the regulator and won.
The judge then forced the SEC to review the filing. Although the SEC is not required to approve the application, the judge ruled that the SEC’s original rejection was not adequately substantiated.
So there is already a precedent for asset managers that suing the SEC in this regard can be successful.
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2024-01-03 11:48:49
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