James Seyffart, a Bloomberg Intelligence ETF research analyst renowned for his spot bitcoin ETF analysis, recently spoke with Frank Chaparro on The Block’s Scoop podcast, according to a report by The Block’s James Hunt.
Anticipated Approval Window: Seyffart reiterated his prediction that the window for a potential spot bitcoin ETF approval is likely between January 8 and January 10, 2024. Since October, he has maintained a 90% chance of approval by January 10, coinciding with the final deadline for the Ark and 21Shares application, which was filed before other major players like BlackRock.
SEC’s Strategic Delays: Seyffart suggested that the SEC has strategically delayed decisions on spot bitcoin ETFs. He believes the SEC aims to approve multiple applications simultaneously to avoid giving any single firm a competitive advantage. He argues that this mass approval strategy will likely occur in January.
SEC’s Approach to ETF Approval: According to Seyffart, the SEC is cautious about not playing favorites in the ETF approval race. He cited reliable sources and extensive research, including analyzing calendars and deadlines, to support his predictions. Seyffart emphasized the SEC’s likely intention to approve all applications at once if they decide to approve them.
Precedence in Ether Futures ETFs: Seyffart noted the unique situation with Ether futures ETFs, where the SEC ensured simultaneous approvals for various issuers. This precedent supports his belief that the SEC will adopt a similar approach for spot bitcoin ETFs.
Impact of Grayscale’s Legal Victory: Seyffart highlighted Grayscale Investments’ recent legal win against the SEC as a significant factor that could influence the SEC’s decision. He believes this victory has cornered the SEC, forcing it to reconsider its previous reasons for denying ETF applications.
Grayscale’s Unique Position: Despite the general optimism, Seyffart speculated that Grayscale might not be among the first to receive approval due to its unique situation and ongoing discussions with the SEC.
Spot Ether ETFs – A Different Scenario: Seyffart views the prospect of spot Ether ETFs as a completely different challenge. He acknowledged potential arguments the SEC might use to delay Ether ETFs, such as differences in market maturity and Ethereum’s proof-of-stake model. However, he remains optimistic about eventual approvals, likely by the end of May.
Approval Process and Timeline Uncertainties: Seyffart explained the complexities of the ETF approval process, involving both the SEC’s Trading and Markets division and the Corporate Finance division. He suggested that while 19b-4 approvals might come swiftly, the launch of ETFs could be delayed if S-1 prospectuses are not promptly approved.
Market Response and Adoption: Seyffart cautioned that major brokerages and banks might adopt a cautious approach, potentially slowing the immediate uptake of these ETFs. He anticipates initial interest from independent IRAs and advisors, with significant long-term potential for billions in inflows, especially if firms like BlackRock are involved.
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