Analysts believe that the probability of Bitcoin ETF approval has risen to 50%. Is the price of the currency really going to rise sharply?

Analysts from well-known financial institutions, including Bloomberg, believe that due to the unpredictability of the U.S. Securities and Exchange Commission (SEC), the probability of the Winklevoss brothers' Bitcoin ETF Coin being approved is quite high.

There are many factors in the works for Coin ETFs. Some of them could greatly contribute to the SEC approving the world’s first Bitcoin ETF, while others could completely eliminate the possibility of the public getting access to a Bitcoin ETF.

Based on the SEC’s past decisions and attitudes towards innovative ETFs, it is indeed not favorable for the Winklevoss Coin ETF to be approved. However, the participation of a well-known financial institution worth $30 billion and analysts independent of the SEC and the Winklevoss brothers, such as quantitative traders from KCG and Susquehanna, has brought hope to this ETF.

Why Analysts Think a Bitcoin ETF Might Be Approved

Over the past few years, Bitcoin has been described as digital gold. However, Bitcoin has not yet realized its full technical potential as an efficient and low-cost settlement network. As a result, the vast majority of Bitcoin users currently use the Bitcoin network only to protect their own wealth and settle large transactions, which was previously impossible without the involvement of intermediaries.

As Bloomberg Intelligence senior ETF analyst Eric Balchunas explains, past ETFs approved by the SEC opened up new markets but didn’t generate as much traction and industry interest as the SEC-approved ASHR.

Balchunas said:

“ETFs are almost evenly matched in terms of support and opposition. You may run into regulatory, liquidity and security issues, but ETFs have historically opened up new markets for these reasons, and a great example of this is the SEC’s approval of ASHR, which was approved before corporate America implemented quotas.”

Spencer Bogart, vice president of securities research at Needham & Co, previously pointed out that the chances of a Bitcoin ETF being opposed are as high as the chances of being approved, because if the ETF is successful, the SEC officials who approved it will not receive any incentives. However, if the ETF ultimately fails and causes market turmoil, the officials who approved it will be held accountable.

Before the official results came out, Balchunas said that the probability of the Bitcoin ETF being approved was 50%. The Bitcoin industry and community are quite optimistic about the possibility of the Bitcoin ETF being approved, mainly because the Winklevoss brothers will let a reputable financial institution, State Street Bank, run the ETF and be responsible for the audit process .

Balchunas believes that one of the advantages of this ETF structure is that Bitcoin is at a premium , which is much cheaper than existing public Bitcoin investment vehicles. For example, Bitcoin OTC market vehicles, such as the Bitcoin Investment Fund (GBTC), Bitcoin is usually traded at a high premium in major regulated markets.

Currently, GBTC is trading at $129 per share, which is equivalent to a Bitcoin price of $1,290. The average price of Bitcoin in the global market is $1,250.

Balchunas said:

“Even if the liquidity of high yield is a little bit poor, you might be able to trade a bitcoin ETF at a 1% or 2% premium, which is still better than the OTC market.”