Monday, May 20, 2024

Bernstein, a prominent asset management company, anticipates that the United States Securities and Exchange Commission (SEC) will greenlight the first spot Bitcoin exchange-traded fund (ETF) in the period stretching from mid-October this year to mid-March 2024. The firm’s analyst asserts that the potential for crypto ETFs is not confined solely to Bitcoin and is likely to encompass a range of cryptocurrencies.

Bernstein’s Projections on Spot Bitcoin ETF

Gautam Chhugani, the Managing Director and Senior Analyst of Global Digital Assets at Bernstein, foresees that the SEC is set to authorize the first spot Bitcoin ETF by the middle of March next year. In a recent communication, Chhugani opined that the judicial decision in favor of crypto asset management company Grayscale Investments concerning its proposed conversion to a Bitcoin ETF constitutes a pivotal moment. Describing the decision as a “seminal victory over the SEC,” he stressed that the judgment had ramifications beyond Grayscale’s conversion and set clear criteria for regulatory evaluation of spot crypto ETF applications. Chhugani elaborated:

The scope for crypto ETFs, we conjecture, will not be confined to Bitcoin but will broaden to include multiple digital assets.

Continuing his analysis, Chhugani indicated that the recent positive legal outcomes for Ripple and Grayscale demonstrate a shift from past crypto cycles that were dominated by retail investors. “The current cycle, although slower to materialize, is being constructed on a more robust foundation of regulatory transparency and the entrance of strategic, long-term institutional actors,” he noted.

District Judge Analisa Torres recently delivered a partial verdict in favor of Ripple Labs, opposing the SEC’s standpoint regarding the sale and offering of XRP tokens. The SEC is presently attempting to overturn this judicial ruling.

Despite having approved numerous Bitcoin futures ETFs, the SEC has yet to approve any spot Bitcoin ETFs, often citing apprehensions related to market manipulation. Nevertheless, Chhugani argued that the court’s decision in the Grayscale case effectively counters this position, concluding that “Bitcoin futures prices are intrinsically linked to spot market prices.” He stressed:

Therefore, it is our assessment that the cryptocurrency sector will witness its inaugural spot Bitcoin ETF within the designated timeframe of mid-October to mid-March 2024.

The SEC has deferred ruling on all spot Bitcoin ETF proposals until the first quarter of next year, including a submission from Blackrock, the world’s largest asset management institution. Jay Clayton, the former Chair of the SEC, mentioned last week that the authorization of a spot Bitcoin ETF is merely a matter of time, recognizing the discernable demand among institutional investors for Bitcoin exposure.

Your thoughts on the potential SEC approval of a spot Bitcoin ETF are welcome in the comments section below.

Frequently Asked Questions (FAQs) about SEC Spot Bitcoin ETF Approval

What is the main prediction made by asset management firm Bernstein regarding a spot Bitcoin ETF?

Bernstein anticipates that the U.S. Securities and Exchange Commission (SEC) will approve the first spot Bitcoin exchange-traded fund (ETF) between mid-October this year to mid-March 2024.

Who is Gautam Chhugani and what is his role in this prediction?

Gautam Chhugani is the Managing Director and Senior Analyst of Global Digital Assets at Bernstein. He has forecasted that the SEC will greenlight the first spot Bitcoin ETF by mid-March 2024, based on current regulatory and legal trends.

What recent court ruling has influenced Bernstein’s prediction?

A court ruling in favor of Grayscale Investments concerning its proposed conversion to a Bitcoin ETF has been cited as a “game changer” by Bernstein. The judgment is considered a landmark win against the SEC and sets the stage for regulatory evaluation of future spot crypto ETF applications.

What other digital assets may benefit from the approval of a spot Bitcoin ETF, according to Bernstein?

According to Bernstein, the opportunity for crypto ETFs will not be confined solely to Bitcoin but is expected to extend into multiple digital assets.

How do recent legal outcomes for Ripple and Grayscale indicate a shift in the crypto industry?

Recent legal victories for Ripple and Grayscale suggest a departure from past crypto cycles, which were predominantly retail-driven. The current cycle, although slower to develop, is based on stronger foundations, including regulatory clarity and strategic, long-term institutional players entering the space.

What concerns has the SEC cited for not approving spot Bitcoin ETFs so far?

The SEC has refrained from approving any spot Bitcoin ETFs due to concerns about market manipulation.

How does the recent court decision regarding Grayscale counter the SEC’s concerns?

The court determined that Bitcoin futures prices are intrinsically linked to spot market prices, countering the SEC’s concerns about market manipulation. This decision is viewed as laying the groundwork for the SEC to approve spot Bitcoin ETFs.

What is the current status of spot Bitcoin ETF applications?

The SEC has postponed decisions on all spot Bitcoin ETF applications until the first quarter of next year. This includes an application from Blackrock, the world’s largest asset management institution.

Did any former SEC officials comment on the future of spot Bitcoin ETFs?

Yes, Jay Clayton, the former Chair of the SEC, stated last week that the authorization of a spot Bitcoin ETF is inevitable, recognizing the growing demand among institutional investors for Bitcoin exposure.

More about SEC Spot Bitcoin ETF Approval

  • U.S. Securities and Exchange Commission (SEC)
  • Bernstein Asset Management
  • Grayscale Investments Court Ruling
  • Ripple Labs Legal Outcome
  • Blackrock Asset Management
  • Commentary from Former SEC Chair Jay Clayton

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6 comments

David Lee September 8, 2023 - 1:53 am

The courts seem to be warming up to crypto, so I’d say there’s some solid grounds for optimism. But mid-March 2024 feels like a long time to wait, wish it could happen sooner!

Reply
Sara O'Donnell September 8, 2023 - 2:56 am

good read, though I’m not sure if I’d put my money on Bernstein’s prediction. regulatory climate’s always changing you know?

Reply
Kevin Smith September 8, 2023 - 6:49 am

If Jay Clayton thinks its inevitable then I gotta say, there’s hope. but what’s the SEC waiting for, lets get this rolling already.

Reply
Emily Adams September 8, 2023 - 8:26 am

Interesting how the focus is shifting frm retail investors to institutional. Finally, the big boys are taking crypto seriously!

Reply
Nina Harris September 8, 2023 - 9:40 am

So grayscale’s win could really pave the way, huh? If that ruling sets the precedent, it might just open the floodgates. Fingers crossed.

Reply
Mike Johnson September 8, 2023 - 10:49 am

Wow, Bernstein’s making some bold predictions here. I’ve been following the SEC’s movements for a while and its really anyone’s guess at this point. But hey, if they’re right, that’s a game changer for the crypto world.

Reply

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