According to Elliot Z. Stein, senior legal analyst at Bloomberg Intelligence, the company behind the world’s largest Bitcoin fund has a 70% chance of defeating the United States Securities and Exchange Commission (SEC) in a major lawsuit. the crypto industry.
Given the circumstances, analysts at the company assign a 50% chance that a Bitcoin spot ETF will be approved in the US this year.
Greyscale, BlackRock and SEC
According to Stein, the upbeat outlook for Grayscale’s lawsuit may actually benefit BlackRock — which filed a spot ETF product last week — rather than Grayscale’s own filing.
“The SEC and Chairman Gary Gensler could be bracing for a loss and seek to preemptively mitigate it or render it meaningless by approving the spot Bitcoin ETF application before or around the same time as a court decision, writing the analyst in a Tuesday note.
Grayscale’s lawsuit accused the SEC of violating administrative procedure law and securities exchange law by arbitrarily denying its application for a Bitcoin cash ETF last year, despite choosing to approve de many similar futures ETF products.
The SEC has rejected all cash ETF applications to date, citing failures by their potential issuers to provide sufficient protections and oversight against market manipulation.
In the first round of oral argument in March, the three justices overseeing the case expressed skepticism of the SEC’s case, saying the agency “provided no explanation for the fact that the petitioners deceived”. For Stein, this skepticism increased Grayscale’s chances of victory by 40% to 70%.
BlackRock’s Approval Ratings
Bitcoin surged above $31,000 this week on optimism that a Bitcoin spot ETF could be approved following BlackRock’s filing. Past submissions from the $10 trillion asset manager have a historic approval rating of 575:1.
The SEC itself approved a leveraged Bitcoin Futures ETF last week. Bloomberg ETF analyst James Seyffart interpreted this as a sign that the SEC’s attitude towards bitcoin products might be “clearing up,” according to a Tweeter Friday.
That said, there is one aspect of BlackRock’s ETF filing that Seyffart believes could undermine its candidacy: its partnership with Coinbase for custody — an exchange the SEC has just filed a major complaint against.
“You have to take it as a risk,” he said during a interview on the Unchained podcast on Friday. “We don’t think the chance of this thing being approved is 70% like we think for the grayscale trial. The odds are still against BlackRock.
Binance Free $100 (Exclusive): Use this link to sign up and receive $100 free and 10% off Binance Futures fees for the first month (terms).
PrimeXBT Special Offer: Use this link to sign up and enter code CRYPTOPOTATO50 to receive up to $7,000 on your deposits.
