When will the SEC approve a Bitcoin ETF?

So much drama. On Friday, the crypto world was abuzz about an unfounded rumor that the Securities and Exchange Commission chose that day to approve long-awaited Bitcoin ETFs. That didn’t happen, so the buzz shifted to what did: the filing of an 11-page letter by an outfit called Better Markets, which has ties to anti-crypto scourge Sen. Elizabeth Warren (D-Mass.) as well as SEC Chair Gary Gensler. The letter warned the SEC that it would be a “grave if not historic mistake” to approve Bitcoin ETFs, and that doing so would put a U.S. stamp of approval on “a market thoroughly contaminated with fraud and manipulation.”

The letter’s 11th-hour filing—only days before the SEC is obliged to take a vote on a pending Bitcoin ETF petition—and the fact it came from allies of Gensler and Warren led some crypto watchers to fear the approval process would be derailed yet again. “It’d be so utterly fitting for crypto in general if Gary manages to figure out a way to rug everyone,” Bloomberg analyst James Seyffart noted dryly. (The term “rug” is common crypto parlance for pulling a sudden trick or scam).

Despite a flurry of worried tweets about the letter, it’s unlikely the Better Markets missive is part of a last-minute plot to help the crypto-hating Gensler sandbag the Bitcoin ETF applications one more time. This is not least because the group’s letter, on closer inspection, appears to be little more than a rewarmed version of an earlier document from this summer. The evidence for this is that the group’s initial filing contained the wrong date and that Better Markets did not even bother to provide an up-to-date list of companies seeking a Bitcoin ETF.

The upshot is that the popular thesis about how and when the SEC will issue an approval is probably correct. That thesis holds that, after the agency got smacked down in court, it will use this Wednesday, Jan. 10—when it is obliged to supply an answer to one of the applications—to approve a batch of filings at once so as not to give any one would-be Bitcoin ETF issuer a head start.

While imminent approval seems like a sure thing, that doesn’t mean the end of the drama. There are still two big questions for which no one has a clear answer. The first is which firm will grab the lion’s share of the market—BlackRock, Grayscale, or someone else—and the second is what an SEC approval for ETFs will mean for the price of Bitcoin.

The bear case, which is getting the most play, is that any price pop from the SEC’s approval is already baked in and that Bitcoin will drop once investors “sell the news.” The bull case is more subtle but also compelling. It involves the idea of “model portfolios,” which—as an ETF expert tells Axios—involves finance titans like BlackRock building off-the-shelf investment portfolios that are simply cut-and-pasted by many institutions. If those model portfolios will soon include Bitcoin, well, you get the idea. Do you have a strong reason to believe the bull or bear case for Bitcoin ETFs will prevail? If so, let me know.

Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts

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