Spot Bitcoin ETF Approval Imminent, Ether ETFs Face Longer Wait

• Spot Bitcoin ETF approvals are likely in January, as the SEC wants to approve multiple issuers simultaneously and avoid playing favorites. Grayscale’s legal win has also backed the SEC into approving spot Bitcoin ETFs.
• Spot ether ETFs face more uncertainty than Bitcoin ETFs. The SEC may see differences between Bitcoin and ether around aspects like market structure and consensus mechanisms. While eventual approval is likely, the timeline is less clear.
• The timeline between SEC approval and ETFs actually launching and trading remains uncertain. Delays could occur between SEC divisions clearing approvals and prospectuses. The unprecedented nature makes launch timelines hard to predict.

Bloomberg Intelligence ETF research analyst James Seyffart recently discussed the outlook for spot Bitcoin and Ether ETF approvals in an interview on The Scoop podcast. He explained why spot Bitcoin ETFs are likely to be approved in January, but spot Ether ETFs face more uncertainty.

The SEC’s Approach

Seyffart said the SEC wants to approve spot Bitcoin ETFs from various issuers all at once, rather than picking winners by approving one firm’s application first. This avoids the SEC playing “kingmaker” and giving any firm an advantage.

Seyffart said the SEC took a similar approach with Ether futures ETF approvals earlier this year, going to great lengths to approve them all simultaneously. He believes this signals they will likely do the same for spot Bitcoin ETFs.

Impact of Grayscale’s Legal Win

According to Seyffart, Grayscale‘s recent court victory against the SEC will make spot Bitcoin ETF approvals more likely. The ruling undermined several of the SEC’s past reasons for rejecting Bitcoin ETFs.

Seyffart said this has backed the SEC into a corner, forcing them to be more open to approvals. However, Grayscale may not get approval on the first day since its situation is unprecedented.

Outlook for Ether Spot ETFs

While Seyffart believes spot Bitcoin ETF approvals are likely in January, he said spot Ether ETFs are a “completely different animal.”

He outlined reasons why the SEC could see Bitcoin and Ether differently, including around market structure and differences between proof-of-work and proof-of-stake.

Overall, Seyffart thinks spot Ether ETFs will ultimately be approved, but there is more uncertainty around the timeline.

Potential Timeline for Launch After Approval

Seyffart explained the complexities around the timeline between SEC approval and ETFs actually launching and trading. While approvals fall under one SEC division, prospectuses must still get cleared by another division. This could lead to delays between approval and launch.

Seyffart said it’s hard to predict timelines with certainty given the unprecedented nature of crypto ETFs. Cautious approaches by brokerages could also slow uptake.

Potential Breakthrough

In summary, Seyffart believes January approvals for spot Bitcoin ETFs are likely but Ether is less certain. The timeline between approval and launch remains unclear. Seyffart provided an insightful overview of the SEC’s thinking and process around these eagerly anticipated new crypto investment vehicles.