Bloomberg’s ETF analyst Eric Balchunas suggests that while it’s improbable, there’s still a slight chance the SEC might deliver what he calls the “biggest shock in a decade.”
Even though the odds are low, Balchunas points out that a potential rejection of a spot Bitcoin exchange-traded fund (ETF) this month by the Securities and Exchange Commission would likely be more about the regulator seeking “additional time” rather than an outright refusal.
Balchunas and fellow ETF analyst James Seyffart maintain a 90% likelihood of approval by January 10. However, they haven’t increased the odds due to this concern.
“We’re cautious because if we don’t witness it in the next fortnight, it’s more about needing more time.”
Balchunas emphasizes that the 10% chance includes various potential outcomes, stating, “I don’t foresee an outright denial.”
Despite this, he highlights the significant effort both the SEC and Bitcoin ETF issuers have invested, making a last-minute rejection seem highly unlikely.
“This would be an unprecedented move. Everyone has put in immense effort, especially during the holidays. ‘Sadistic’ might not even capture the severity of it.”
While crypto research firm K33 Research’s analyst Vetle Lunde echoes Balchunas’ sentiment, placing the probability of an ETF rejection at a mere 5% in a January 2 market report.
Balchunas speculates that if the SEC were to outright reject the ETF, fund issuers might take a page from Grayscale’s book and initiate legal action against the regulator.
“People have invested too much time and money to back down now. It wouldn’t just end there. I doubt there would even be a cooling-off period this time. It would be chaos.”
Meanwhile, public comments continue pouring in for the SEC’s review of the filings. Recent submissions as of January 2 have explicitly urged the rejection of the ETFs, citing concerns about Bitcoin’s decentralized nature and its appeal to authoritarian regimes seeking to evade sanctions and control citizens through unconventional financial means.
