The fate of the Bitcoin price throughout the year largely lies in the answer to one question: will a Bitcoin spot ETF be approved in the United States?
Joe Carlasare – a trade litigator supporting Bitcoin – tweeted on Monday that he gives such a product a 30-40% chance of launching within a year. He later spoke with CryptoPotato to explain how he arrived at these numbers.
The problem with the Grayscale lawsuit
According to Carlasare, the market’s best bet to launch a spot ETF remains Grayscale’s lawsuit against the U.S. Securities and Exchange Commission (SEC).
As the owner of the world’s largest Bitcoin fund, Grayscale sued the regulator last year for denying its ETF application in an “arbitrary and capricious” manner, despite having several similar products approved in the form of Bitcoin futures ETF.
The case received its first hearing in March, where the justices appeared to favor Grayscale’s arguments more than those of the SEC. This prompted some analysts, including Bloomberg’s Elliot Z. Stein, to assign 70% chance of victory from Grayscale, increasing the odds of a cash ETF approval by the end of the year.
Carlasare, however, refuses to be so bullish — especially since a Grayscale win won’t necessarily lead to a spot ETF.
For what seems like the 100th time, my personal opinion is that the probability of success in getting a bitcoin spot ETF approved in the short term (a year from now) is still 30-40% — which I consider a pretty good rating.
I strongly reject the idea that approval is highly likely… https://t.co/fAuNJ9pkhh
— Joe Carlasare (@JoeCarlasare) July 3, 2023
“The hardest part about handicapping the Grayscale v SEC lawsuit is that a ‘victory’ may simply mean that the appeals court orders the SEC to reconsider its decision,” the attorney explained to CryptoPotato via DM. “In other words, the Court could simply send the case back for retrial and evaluation before the SEC.”
BlackRock’s SSA with Coinbase
A review by the SEC has inevitably meant the rejection of every candidate with a similar product so far. Nonetheless, the market is optimistic that a filing last month from BlackRock – the world’s largest asset manager – may pass given the company’s phenomenal capacity. success rate against the SEC with past claims.
The SEC called the filings by BlackRock and Fidelity “inadequatelast Friday for failing to share a specific Bitcoin exchange with which their respective exchanges, NASDAQ and CBOE, would form a Supervisory Sharing Agreement (SSA). The two companies have already filed a new request, specifying that their planned SSA will be with Coinbase.
While Coinbase is the largest Bitcoin exchange in the United States, Carlasare worries that the platform does not represent a “sufficient size” market, as required by the SEC.
“Sufficient size is somewhat ambiguous, but they said it must be a large enough market that a person or company trying to manipulate the Bitcoin spot market would necessarily have to trade on that platform. shape,” he explained. “If you apply this to the SSA with Coinbase, one can conclude that it will not satisfy [the] SEC, especially where the majority of cash trading volume is outside of the United States”
Overall, Carlasare gives Grayscale a 50% chance of winning against the SEC in its lawsuit, and Coinbase a 40% chance of being the “secret sauce” needed to get BlackRock’s ETF approved. He considers both sets of odds to be “optimistic”.
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