Bitcoin ETF Still Has Rejection Chances — Bloomberg Analyst

LUCKNOW (CoinChapter.com) — There are chances that the Securities and Exchange Commission (SEC) may reject spot Bitcoin exchange-traded funds (ETFs), according to Bloomberg ETF analyst Eric Balchunas. However, if they are rejected, it will likely be because the SEC needs more time rather than an outright denial. 

Will SEC Drop Hammer on Bitcoin ETFs by Jan. 10? 

Balchunas pegged the odds of Bitcoin ETF approval by January 10th at 90%. He and fellow analyst James Seyffart have not raised the odds higher due to concerns that the SEC may ask for an extension to continue reviewing the filings.  

“I would say if we don’t see it in the next two weeks, it’s more because they need more time,” said Balchunas, adding:

“I don’t think that we’re going to see a full-out denial.“

While possible, Balchunas believes an outright last-minute rejection is unlikely given the immense time and effort already invested by both the SEC and the ETF issuers. 

“This would be the rug pull of the decade. Everybody put a lot of work into this, especially over the holidays. Sadistic might not even be strong enough a word for it,” he stated.

Analyst Vetle Lunde from crypto research firm K33 Research offered a similar perspective in a Jan. 2 market report. He assessed the odds of an outright rejection at just 5%.

Should the SEC unexpectedly issue a denial, Balchunas expects ETF issuers may follow Grayscale Investments’ lead and launch lawsuits against the regulator. With so much money and effort already spent trying to get Bitcoin ETFs approved, he does not foresee issuers simply giving up at this point.

“People have spent too much money and tried too hard to give up now. So yeah, it would not be over. I don’t even think there’d be a cooling-off period this time. I think there’d be hell,” said Balchunas.  

Recent Public Comment Urged SEC to Reject Bitcoin ETF

The public comment period for the Bitcoin ETF filings is open. The most recent feedback submitted on January 2nd requested the SEC to reject spot Bitcoin ETF outright. 

One of the most recent letters submitted to the SEC claimed that certain aspects of Bitcoin could benefit authoritarian regimes. Specifically, the letter argued that Bitcoin’s decentralized, borderless design allows it to operate outside of traditional financial channels. This could make Bitcoin “attractive to authoritarian regimes looking to evade sanctions and exert greater control over their citizens,” the letter alleged.

This kind of negative feedback from the public regarding Bitcoin ETF cast a little doubt on approval. Economist Peter Schiff believes that Bitcoin speculation ahead of a potential ETF approval may fizzle out before any official decision, leaving few buyers to sell to if approval comes.

This contrasts with the perspective of analysts like Balchunas, who still see strong odds of an ETF green light in January.