The “window period” opens tomorrow, is there a chance for spot Bitcoin ETF to be approved?

The hype around spot Bitcoin ETFs has been fueled.

Bloomberg analysts James Seyffart and Eric Balchunas said today that starting tomorrow (November 9th, Eastern Time), the U.S. Securities and Exchange Commission ( SEC ) will have a short window during which it can approve 12 pending spot Bitcoin ETF applications.

The approval includes conversions of BlackRock ’s BlackRock iShares Spot Bitcoin ETF and Grayscale’s Grayscale Bitcoin Trust ( GBTC ).

Eight-day window

The analysts' reasoning: When the SEC extended the deadline for pending ETF applications, it selected Nov. 8 as the last day for rebuttal comments. It's also possible that the SEC approves several applications between now and Nov. 17, but to be fair, all funds must begin trading on the same day.

“The SEC issued delay orders to BlackRock, Bitwise , VanEck , WisdomTree , Invesco , Fidelity, and Valkyrie simultaneously,” Seyffart wrote on Platform X. “If the agency wishes to allow all 12 of the proposed offerings to launch simultaneously – as we believe – this time window is the first available window since Grayscale’s court victory was confirmed.”

A spot Bitcoin exchange-traded fund (ETF) would allow investors to gain exposure to BTC by purchasing shares backed by Bitcoin purchased by issuers without having to hold and manage the asset themselves.

Balchunas also noted that the SEC’s educational short video published on Platform X may have further bolstered hopes of early approval. The commission published similar materials shortly before approving ProShares ’ bitcoin futures ETF in October 2021.

Seyffart and Balchunas added that even if approval is not obtained this month, "we still believe there is a 90% chance of approval on January 10th."

However, it may take several months for a spot Bitcoin ETF to be listed for trading. Analyst Seyffart pointed out: Even if the SEC approves the rule change that allows ETF trading (194-b filing), this is completely different from approving the fund's registration statement (S1 filing). Both documents need to be approved before the Bitcoin ETF can begin trading.

Assuming approval is granted this week, it will likely be at least a month (and possibly several months) before any ETF is actually launched, US attorney Scott Johnsson explained on X Platform. Many applicants’ S-1 filings are still under review, and there is no real hard deadline for the process. It could be weeks or even months between approval and launch.

But the rise of BTC has proved that investors are optimistic about it. BTC rose by more than 20% in October. After the news was released, it rose to $36,000 in the short term.

Grayscale has started negotiations with the SEC

CoinDesk reported on Wednesday, citing people familiar with the matter, that Grayscale has been in contact with the SEC’s Division of Trading and Markets and the Division of Corporate Finance after a court ruled that the SEC must re-examine the GBTC conversion application.

SEC Chairman Gary Gensler has said that the Division of Corporation Finance is responsible for providing feedback, while the Division of Trading and Markets reviews documents, and both departments play an important role in the ETF approval process.

Grayscale CEO Michael Sonnenshein said his company has not received any news from the SEC regarding approval of a spot Bitcoin ETF.

Grayscale Chief Legal Officer Craig Salm said in an interview with Coindesk : "Right now we are just focused on constructive engagement with the trading and market department. There are still some things that need to be resolved." He also pointed out that other applicants for Bitcoin ETFs (including financial giants BlackRock and Fidelity) seem to have made progress in the SEC's negotiations with them. "Overall, it's been a good engagement. It's just a matter of when, not if."

It’s just a matter of time

Analysts say spot Bitcoin ETFs could attract $50 billion to $100 billion in inflows over the next five years, which could lead to a major shift in the asset’s market dynamics. According to crypto asset manager CoinShares , crypto funds have attracted $767 million worth of deposits in the past six weeks alone.

Of all the applicants, investors are most excited about the prospect of BlackRock’s approval, a leading global financial firm with approximately $8.5 trillion in assets under management. Steven Schoenfield, former managing director of BlackRock and current CEO of MarketVector Indexes, predicts that BlackRock’s approval could bring $200 billion to Bitcoin and push the BTC price to $330,000.

Several industry insiders said that no matter how tortuous the process is, it is only a matter of time before a Bitcoin ETF lands on Wall Street . JPMorgan analysts said in a report earlier this week that a spot Bitcoin ETF now seems almost inevitable because "any rejection could trigger a lawsuit against the SEC, causing more legal trouble for the agency."