Bernstein: Possibility of US approving Bitcoin ETF is quite high

Bernstein predicts high chance of US approving Bitcoin ETF.

Author: Will Canny, CoinDesk; Translation: Matsumi, Blocking

Bernstein, a brokerage firm, stated in a research report on Monday that the U.S. Securities and Exchange Commission’s (SEC) stance on spot bitcoin exchange-traded funds (ETFs) is difficult to maintain and that the chances of spot bitcoin ETFs being approved are quite high.

Bernstein pointed out that the SEC has already allowed futures-based bitcoin ETFs and recently approved leverage-based futures ETFs, provided that futures pricing comes from regulated exchanges such as CME.

Analysts led by Gautam Chhugani said that “the SEC believes that spot bitcoin ETFs are unreliable because spot exchanges (such as Coinbase) are not regulated by them, so spot prices are unreliable and easily manipulated.”

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Despite receiving numerous applications, regulators have not yet approved spot bitcoin ETFs. A division of BlackRock submitted a filing last month to form a spot bitcoin ETF. This has prompted other asset management firms such as Invesco and Wisdom Tree to apply for or reapply for bitcoin ETF products.

The report notes that Grayscale is currently trying to convert its Grayscale Bitcoin Trust Fund (GBTC) into an ETF and is currently under appeal in court.

Analysts wrote: “The court does not seem to believe that futures prices are not derived from spot prices, so allowing futures-based ETFs but not spot trading seems to be a bitter pill for the court to swallow.”

In addition, the report states that the industry is now suggesting that spot exchange operators reach supervisory agreements with regulated exchanges such as Nasdaq.

The brokerage said that the lack of a bitcoin spot ETF has led to the growth of over-the-counter trading products such as Grayscale Bitcoin Trust (GBTC), which are more expensive, less liquid, and less efficient.

The report states: “The SEC would rather introduce a regulated bitcoin ETF led by more mainstream Wall Street participants and subject to the supervision of existing regulated exchanges than have to deal with a gray market trading product that fills institutional gaps.”

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