Will The SEC Approve A Bitcoin Spot ETF In 2023? Lawyer Breaks Down The Odds

The fate of the bitcoin price throughout the rest of the year largely rests on the answer to one question: Will the ETF be approved in the US?

Joe Carlasar — ​​one of the commercial litigators behind Bitcoin — tweeted on Monday that he gives such a product a 30-40% chance of launching within a year. speak with Potato encryption to explain how he arrived at those numbers.

The problem with the Grayscale suit

According to Carlasare, the market’s best bet for launching a spot ETF remains with Grayscale’s lawsuit against the US Securities and Exchange Commission (SEC).

As owners of the world’s largest bitcoin fund, Grayscale sued the regulator last year for refusing to apply its ETF in a “random and volatile” manner, despite the approval of several similar products in the form of bitcoin futures ETFs.

The case reached its first oral hearing in March, where the justices appeared more sympathetic to Grayscale’s arguments than the SEC. This prompted some analysts including Bloomberg’s Elliot Z. Stein to hiring 70% chance of winning for Grayscale, which increases your odds of immediate ETF approval by the end of the year.

However, Carlasare refuses to be too bullish — especially since a Grayscale win wouldn’t necessarily lead to an instant ETF.

For what seems like the 100th time, my personal view is that the probability of success in getting a Bitcoin spot ETF approved in the near term (within a year) is still 30-40% – which I consider fairly good odds.

I strongly reject the view that approval is very likely… https://t.co/fAuNJ9pkhh

– Joe Carlasare (@JoeCarlasare) July 3, 2023

“The tricky part about blocking Grayscale v SEC is that ‘winning’ may just mean that the appeals court directs the SEC to reconsider its decision,” the attorney explained. Potato encryption via DM. In other words, the court can only send the case back for further action and evaluation before the SEC.

BlackRock’s SSA with Coinbase

The review by the Securities and Exchange Commission (SEC) has inevitably meant a rejection for every similar product applicant to date. However, the market is optimistic that a filing last month from BlackRock – the world’s largest asset manager – can pass, given the company’s massive phenomenology. success rate v. Securities and Exchange Commission with prior filings.

The Securities and Exchange Commission described the filings of BlackRock and Fidelity as “Insufficientlast Friday for failing to share a specific Bitcoin exchange, through which their exchanges, NASDAQ and CBOE, would form a Surveillance Sharing Agreement (SSA). Both companies have already returned, stating that their planned SSA will be with Coinbase.

While Coinbase is the largest Bitcoin exchange in the US, Carlasare fears that the platform does not represent a market “of sufficient size,” as the SEC requires.

“Sufficient volume is somewhat vague, but they said it would have to be a large enough market that a person or company trying to manipulate the Bitcoin spot market would need to necessarily trade on that platform,” he explained. “If you apply that to an SSA with Coinbase, one can conclude that this will not satisfy the[SEC]SEC, especially when the majority of spot trading volume is outside the US.”

Overall, Carlasare gives Grayscale 50% odds of winning against the SEC in the lawsuit, and Coinbase 40% for being the “secret sauce” needed to get BlackRock’s ETF approved. Both sets of possibilities are considered “optimistic”.