The possibility of BlackRock securing approval for its Bitcoin Exchange Traded Fund (ETF) is evenly poised, according to Eric Balchunas, Bloomberg’s lead ETF analyst. Simultaneously, there seems to be a growing likelihood of Grayscale winning its lawsuit against the U.S. Securities and Exchange Commission (SEC).

Balchunas’s assertion of a 50% likelihood for BlackRock’s Bitcoin ETF comes in the wake of an observation by Elliott Stein, Bloomberg Intelligence’s senior litigation analyst. Stein now estimates that Grayscale has a 70% chance of success in its case against the SEC.

Balchunas suggests that the SEC might view BlackRock’s ETF proposal more favorably as a means to maintain its reputation. This could potentially be achieved by endorsing an ETF from a well-established traditional finance firm like BlackRock over Grayscale.

Ever since Grayscale contested the SEC’s decision to reject its application in June 2022, a legal tussle has ensued between the two parties, culminating in oral arguments heard by a panel of three U.S. federal appellate court judges on March 7.

Stein believes that Grayscale’s probability of winning its lawsuit against the SEC has grown from 40% to 70% following these oral arguments. According to him, all three judges on the panel seemed to lean towards Grayscale’s stance based on their lines of questioning. Stein expects a resolution to the case by August.

Bitcoin ETF applications have been at the forefront of the crypto industry recently, with financial giants like Fidelity, Invesco, Wisdom Tree, and Valkyrie joining BlackRock in awaiting the SEC’s green light. Should the SEC eventually approve applications from firms such as JPMorgan, Morgan Stanley, Goldman Sachs, BNY Mellon, and Bank of America, the digital asset market would be opened up to organizations with a combined $27 trillion in assets under management.

While the judgment in Grayscale’s case remains pending, the Grayscale Bitcoin Trust (GBTC) has witnessed a 134% rise in 2023, reaching a peak of $19.47, its highest since May 13, 2022. Moreover, the GBTC’s share price discount to its net asset value has reduced to 31% as of June 26, the lowest since September 12 last year, indicating a potential shift towards a more positive investor sentiment.

However, in line with the broader crypto market, GBTC remains more than 65% off its record high price of $56.70.