BitGo CEO Mike Belshe said it's "quite likely" the U.S. Securities and Exchange Commission (SEC) will reject a series of spot bitcoin (BTC) exchange-traded fund (ETF) applications despite industry-wide optimism.

Speaking in a Bloomberg interview, Belshe said the SEC might reject current applications on the basis that exchanges and custody are not separated. Coinbase (COIN) has been selected by several applicants as a custody partner for a potential ETF.

"There are a lot of risks in that entity [Coinbase] that are not understood," Belshe said. "I think that the SEC could quite likely come back and say: 'Nope, you've got to separate out those things fully before we move forward.'"

Several ETF analysts have said that the chances of an ETF being approved in January are around 90%. The SEC has rejected numerous applications over the years, citing concerns over potential market manipulation and a lack of customer protection.

Fund manager BlackRock filed an application for a spot bitcoin ETF in June. Since then, the price of BTC has rallied by 45% to $36,200, according to TradingView data.