What Happens If the SEC Rejects Bitcoin ETFs? Will Rejected ETFs Trigger Lawsuits?
As the Securities and Exchange Commission (SEC) gets closer to deciding on a spot Bitcoin exchange-traded fund (ETF), Bloomberg ETF analyst Eric Balchunas remains cautiously optimistic. Despite a high likelihood of approval by January 10, concerns persist about a potential delay rather than an outright rejection.
Seeking More Time Instead of a Flat Denial
Balchunas, along with fellow ETF analyst James Seyffart, believes the slim chance is linked to the SEC possibly needing “more time.” While not ruling out an outright rejection, Balchunas emphasizes that the 10% uncertainty covers both possibilities.
Unlikely Last-Minute Rejection
Balchunas dismisses the notion of a last-minute outright rejection, pointing to the extensive efforts invested by the SEC and Bitcoin ETF issuers. He underscores the industry’s commitment, referring to an outright denial as the “rug pull of the decade.”
Analyst Views
Vetle Lunde from K33 Research shares Balchunas’ sentiment, estimating the chances of an ETF rejection at only 5% in a recent market report. Both analysts highlight the substantial dedication and resources invested in securing ETF approval.
Possible Legal Fallout
Balchunas speculates on the aftermath of an outright denial, suggesting that fund issuers may follow Grayscale’s example by launching lawsuits against the SEC. He emphasizes the financial and time investments made by stakeholders, predicting a swift and forceful response if the SEC were to deny approval.
Ongoing Public Feedback
Public engagement in the SEC’s decision-making process continues, with recent submissions urging the outright rejection of spot Bitcoin ETFs. Concerns raised include Bitcoin’s decentralized nature potentially attracting authoritarian regimes seeking to evade sanctions and exert control over citizens.
In conclusion, the upcoming SEC decision on Bitcoin ETFs is eagerly anticipated by industry players and investors alike. While optimism prevails, the possibility of a delay or rejection keeps stakeholders on edge, with potential legal battles and ongoing public discourse adding complexity to the unfolding narrative. The coming weeks will reveal whether the cryptocurrency market witnesses a breakthrough or a setback in the pursuit of a mainstream investment vehicle.
