International Investment Bank: SEC to approve Bitcoin spot ETF to avoid a repeat of the Grayscale case.

International investment bank TD Cowen believes that to avoid the rejection of a Bitcoin spot ETF and potential litigation resulting in a loss, and to demonstrate that existing regulations are sufficient to oversee cryptocurrencies, the U.S. Securities and Exchange Commission (SEC) will approve a Bitcoin spot ETF.

SEC to Approve Bitcoin Spot ETF for Political Reasons

The Block cited a report from international investment bank TD Cowen, stating that the SEC will approve at least one Bitcoin spot ETF by January 10 for various reasons.

Political Considerations

For political reasons, to avoid Congress creating separate legislation for crypto, and to solidify the position of crypto regulators, the SEC will approve the ETF.

The notion of creating separate legislation also contradicts SEC Chair Gary Gensler's consistent stance that existing laws are sufficient for regulation.

Potential Lawsuits and Losses if Denied

TD Cowen believes that if the ETF is denied, the SEC may face lawsuits from issuers with a possibility of losing. Given the SEC's prior loss in the Grayscale case, the SEC will strive to avoid a similar event from recurring.

Read more: SEC Logic Flaws! Why the Court Deemed SEC's Rejection of Grayscale's Spot Bitcoin ETF Application Unreasonable

January 10 is the final date for the SEC to decide on approving Bitcoin spot ETF applications from companies like ARK Investment and 21Shares. The SEC may also rule on other similar applications by then, including over ten ETF issuers such as BlackRock and Fidelity.

Republican-Led Cryptocurrency Bills

Aside from the focus on Bitcoin spot ETFs, the past year has seen attention on cryptocurrency policies, including bills led by Republicans. One bill aims to regulate stablecoins at the federal level, while another takes a comprehensive regulatory approach to the crypto market structure.

According to TD Cowen, there is still a chance to pass the crypto market structure bill during the "lame duck" period, the time between elections and the new government taking office. With Patrick McHenry, Chairman of the House Financial Services Committee, set to step down, he aims to complete this task before the end of his term.

If the crypto market structure bill fails to pass, the stablecoin bill will serve as McHenry's backup plan.

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