An analyst has suggested that the approval of a Bitcoin (BTC) Spot exchange-traded fund (ETF) is unlikely to happen this year, dampening the optimism that surged in the crypto sector following Grayscale’s recent legal victory against the US Securities and Exchange Commission (SEC). 

The SEC has extended its decision deadline on seven ETF filings, causing a decline in investor anticipation and pushing the BTC price below $25,800.

Former Coinbase Director Predicts Unlikelihood Of Bitcoin ETF Approval In 2023

Last week, Grayscale scored a significant legal win when Judge Neomi Rao ruled that the SEC was wrong in rejecting Grayscale’s application to convert its Grayscale Bitcoin Trust (GBTC) into a spot ETF. 

This news initially buoyed market sentiment, causing Bitcoin’s price to surpass $28,100. However, the SEC’s subsequent extension of decision deadlines on several ETF filings has resulted in a 1.1% decline in the BTC’s price, currently trading at $25,700.

In a recent interview with Yahoo Finance, Lory Kehoe, former US-based crypto exchange Coinbase director and head of Blockchain Ireland, expressed his belief that a Bitcoin Spot ETF approval is more likely to occur in 2024. 

Kehoe highlighted the importance of extensive analysis and due diligence throughout the remainder of this year, indicating that the SEC takes media interest into account but ultimately makes independent decisions. He further added: 

The possibility of a spot Bitcoin ETF filing getting SEC approval is an area that is getting an increased level of media interest. I think the SEC takes all that on board but is not afraid to stick to its guns and make its own decisions.

However, Kehoe also expressed his willingness to be proven wrong and see an ETF approval in 2023. According to Kehoe, one of the critical considerations for the SEC is the issue of market manipulation.

The regulator’s primary mandate revolves around investor protection and financial oversight, and it closely scrutinizes whether the market meets its criteria for a regular functioning market. 

If the SEC perceives the Bitcoin market as meeting these criteria, a Bitcoin Spot ETF could gain approval, marking a momentous milestone in the history of cryptocurrencies and bitcoin.

Kehoe emphasized that the approval of a BTC ETF would have far-reaching implications for Grayscale and its investors and the broader crypto and asset management communities. 

It would signify a significant moment in the history of cryptocurrencies, providing increased accessibility and legitimacy to the digital asset market. However, the SEC remains cautious in its evaluation.

While Grayscale’s recent legal victory fueled hopes for a Bitcoin Spot ETF approval, the former Coinbase director suggests that such an outcome is unlikely in 2023. 

The SEC’s decision to extend decision deadlines on several ETF filings has dampened investor anticipation and led to a decline in the BTC’s price. Market manipulation concerns remain a significant factor for the SEC, and the regulator’s scrutiny of the BTC market’s adherence to its criteria will ultimately determine the fate of an ETF. 

If approved, it would signify a substantial milestone for cryptocurrencies and bolster the market’s credibility and accessibility.

Featured image from iStock, chart from TradingView.com