Needham & Company has released a report that examines the prospects of the Winklevoss twins’ proposed bitcoin ETF, Bitcoin Magazine reported.

Authored by Spencer Bogart, a research analyst at Needham & Company, the report lists various aspects related to the bitcoin ETF. The Securities and Exchange Commission has until March 11 to approve or disapprove the ETF.

“We think the positive effect that a bitcoin ETF would have on the price of bitcoin is vastly underappreciated but we also think that the probability of approval is drastically overestimated”, writes Bogart.

According to the report, the listing of the bitcoin ETF will have a profound effect on bitcoin price. Bogart expects to see over $300M of assets flow into such an ETF in the first week. In such a situation, the resulting effort to source the underlying bitcoin for the Trust would likely drive the price of bitcoin up significantly.

“While bitcoin liquidity has improved dramatically in recent years—and average daily trading volume now resembles that of the average security in the S&P midcap 400—it would be hard for the ETF’s authorized participants to acquire $300M worth of bitcoin without significantly pushing price up”, it added.

In addition, it also noted that if the SEC approves a bitcoin ETF, it would add legitimacy in the eyes of the investors. Bogart also believes that the approval of a bitcoin ETF would significantly improve perceived regulatory risk. He explains:

“A mainstream investment vehicle such as a bitcoin ETF would significantly increase the percentage of the population financially exposed to bitcoin and would consequently decrease the political appetite for enacting onerous regulation. Taken together, we think the change in perception and regulatory risk would be at least as significant in driving price up as the technical constraints in sourcing the bitcoin necessary to meet demand for an ETF.”

However, Bogart sees a very low probability (sub-25%) of a bitcoin ETF getting approval in 2017. He added that while there is no specific reason to disapprove the Winklevoss Bitcoin ETF, the confluence of fear, uncertainty and doubt coupled with basic incentives at the SEC will make it very difficult to get approval.

“Given bitcoin’s nascence, we think it’s a difficult task for the SEC to separate the legitimate probability of something going very wrong from the general fear, uncertainty, and doubt that lurks in bitcoin’s wake”, Bogart added.

The report, however, points out that the ETF will get automatic approval if the SEC takes no action. It noted that this approach might be easier for the people responsible for making this decision.

“That said, we understand it is extremely rare for a proposed rule change to make it to this stage—typically either the Commission makes a decision prior to the deadline or the original sponsors of the rule change withdraw the request”, it added.