Prominent analysts and researchers clash over the SEC’s potential January decision on a U.S.-listed Bitcoin spot exchange-traded fund (ETF).
On Tuesday, digital asset management firm Matrixport released a research report elaborating why the U.S. regulator would turn down the applications for Bitcoin spot ETF this month.
Reasons Why a Denial is Likely
According to the Matrixport report, all Bitcoin spot ETF proposals have continuously failed to meet “a critical requirement” that could necessitate the SEC’s approval.
It mentioned that this inadequacy is despite frequent meetings between ETF applicants and SEC staff alongside multiple reviews of refiled applications.
While consenting to the likelihood of the ETFs meeting approval-worthy requirements by Q2 2024, Matrixport anticipates the SEC’s rejection of all proposals in January.
Backing this view, the report highlighted the influence of the current Democratic-dominated five-person voting leadership at the SEC.
Moreover, Matrixport cited the well-known skepticism of SEC chairman Gary Gensler. The firm considers it unlikely that Gensler would vote in favor of approving Bitcoin spot ETFs, emphasizing his December 2023 comments indicating a perceived need for more stringent compliance within the crypto industry.
Furthermore, the report argued that from a political standpoint, there is little incentive to greenlight a Bitcoin Spot ETF. This is because such regulatory endorsement would effectively legitimize Bitcoin as a viable alternative store of value.
Bloomberg Senior ETF Analyst Disagrees
Meanwhile, Eric Balchunas, a senior ETF analyst for Bloomberg, expressed disagreement with the notion of a potential rejection.
In a Wednesday tweet, Balchunas mentioned that he and other ETF analysts with more insider knowledge have not come across any information indicating anything other than a potential green light.
People tagging me like crazy on this “rejection” report. We have heard nothing to indicate anything but approval but I want to give the guy benefit of doubt so I’m asking if he has any sources or if he just speculating. He seems to be bitcoin bull and recently tweeted… https://t.co/KV7k4NXtba
— Eric Balchunas (@EricBalchunas) January 3, 2024
Furthermore, Balchunas highlighted that the argument contradicts multiple mainstream news reporters who claim to have inside sources supporting the likelihood of approval.
He acknowledged the possibility of uncertainty but emphasized that such a turn of events would challenge a significant amount of reliable intelligence, making it a less likely scenario.
Meanwhile, in a recent interview, Balchunas suggested that any rejection is more likely to result from the SEC seeking more time rather than an outright dismissal.