Bloomberg analyst: Bitcoin ETF has a 65% chance of approval

Bloomberg Intelligence’s ETF analysts have raised their expectations for the approval and launch of at least one spot Bitcoin (BTC) exchange-traded fund (ETF) in the United States this year.

“Following a series of developments, we now assign a 65% chance of a cash bitcoin ETF launching this year,” analysts James Seyffart and Eric Balchunas wrote. They had previously assigned a 50% chance.

In recent months, several major institutions, including BlackRock, Fidelity, WisdomTree and Valkyrie, have submitted applications for Bitcoin spot ETFs to make it easier to invest in Bitcoin. While the U.S. Securities and Exchange Commission (SEC) has rejected such applications in the past, many experts say that at least some of the applications will be approved, especially BlackRock's application, which has rarely had its ETF applications rejected in the past.

SEC Chairman Gary Gensler downplayed his role at the agency in a recent interview with Bloomberg, stressing that “there are four other commissioners” when asked about cryptocurrency-related matters.

"This diversion appears to be a change from how he typically approaches these topics," the report said. While the committee has five members, the chair has much greater control, and it would be unusual if the other two Democratic commissioners made a different decision. "We believe this may be a signal that some aspects of the anti-crypto stance are politically untenable for Gensler."

Another positive development is that the SEC appears to have approved Coinbase's bitcoin trading platform, with CEO Brian Armstrong told to delist all cryptocurrencies except bitcoin.

“This solidifies our view that if the SEC is going to compromise on a crypto ETF, it should be a bitcoin ETF,” Seyffart and Balchanus wrote. Coinbase is the most notable surveillance-sharing agreement partner and custodian in many of the current filings.

Finally, the SEC’s case against crypto asset manager Grayscale could serve as a catalyst if the SEC loses in court, as Bloomberg expects it will.