Bitcoin ETF Approval For BlackRock: Analyst Predicts 50% Probability

The possibility of BlackRock, a distinguished investment management firm, obtaining approval for its Bitcoin Exchange Traded Fund (ETF), has been discussed by Eric Balchunas, Bloomberg’s senior ETF analyst.

Balchunas believes that BlackRock faces a 50% chance of getting the green light from the regulatory authorities. This assessment comes amidst Grayscale’s ongoing battle against the Securities and Exchange Commission (SEC), where it appears more probable for Grayscale to emerge victorious.

Grayscale, which appealed the SEC’s rejection of its ETF application in June 2022, has engaged in a series of legal filings and oral testimonies. The latest development in the case saw three U.S. federal appellate court judges presiding over oral arguments on March 7. Elliott Stein, a senior litigation analyst for Bloomberg Intelligence, has revised his prediction of Grayscale’s chances of success, now estimating them at 70% after observing the judges’ lines of questioning during the hearing.

Bitcoin ETF Landscape: Blackrock’s Advantage And Implications

Balchunas offered insight into the SEC’s potential favorability towards BlackRock’s ETF filing. He suggested that the regulatory agency might prefer granting approval to an ETF from a trusted traditional finance (TradFi) firm like BlackRock as a way to save face, rather than favoring Grayscale. This perspective stems from the ongoing legal battle and the SEC’s stance on the matter.

Stein predicts that a conclusion to Grayscale’s case against the SEC will likely be reached by August. The extended legal proceedings and back-and-forth filings have kept the industry eagerly awaiting a resolution. The outcome will have significant implications for the Bitcoin ETF landscape and the broader digital asset market.

BlackRock’s pursuit of a Bitcoin ETF approval has sparked a surge of interest from other industry players. Fidelity, Invesco, Wisdom Tree, and Valkyrie have joined the queue after BlackRock, eyeing the SEC’s approval. Notably, JPMorgan, Morgan Stanley, Goldman Sachs, BNY Mellon, and Bank of America have also submitted applications for similar services. If approved, these financial powerhouses would expose the digital asset market to firms with a combined $27 trillion in assets under management.

While Grayscale’s case remains undecided, the Grayscale Bitcoin Trust (GBTC) has experienced remarkable growth in 2023. GBTC’s price has surged over 134% since the beginning of the year, reaching $19.47, its highest level since May 13, 2022, according to data from Google Finance. 

Additionally, the discount of GBTC’s share price compared to its net asset value dropped to 31% on June 26, the lowest recorded since September 12 of the previous year. This decrease in the discount rate suggests a potentially more positive sentiment among investors toward the product.