Bitcoin (Exchange: BTC=-USS) followers are assigning far too high a likelihood that regulators will OK a fund that tracks the cryptocurrency, which is too bad because approval would provide a major boost to its price, according to one analyst.

Regulators at the Securities and Exchange Commission are weighing whether to approve an exchange-traded fund proposed by Cameron and Tyler Winklevoss . The SEC has been considering a proposal that came into being more than three years ago. The Winklevoss brothers are looking to list the ETF on the Bats exchange.

Should the fund gain approval, it would attract a flood of investor cash that could hit $300 million, according to investment bank Needham and Co. The total value of bitcoins in circulation was $13.8 billion as of Tuesday afternoon trading.

That's the good news.

The bad news is that Needham analysts believe there is very little chance the SEC actually will go ahead and approve the ETF. They say the chances are probably less than 25 percent.

"In contrast to most of the people that we speak to in the industry, we think the probability that a bitcoin ETF will be approved in 2017 is very low," analyst Spencer Bogart said in a research note. "To be clear, we don't see any specific reason to disapprove the Winklevoss Bitcoin ETF, but, instead, think that the confluence of fear, uncertainty and doubt coupled with basic incentives at the SEC will make it very difficult to get approval."

That could come as news to many of bitcoin's avid followers who believe the fund will be approved by March 11, which has been set as the deadline for a ruling. Bitcoin was created more than eight years ago as a digital currency and is accepted by more than 100,000 vendors for payment. It has generated controversy through its use in the underworld and because of several high-profile bitcoin thefts.

"We think the positive effect that a bitcoin ETF would have on the price of bitcoin is vastly underappreciated, and that the probability of approval is drastically overestimated within the industry," Bogart wrote.

Not to worry, however.

Regardless of whether the ETF becomes reality, Bogart said bitcoin will be fine. Bitcoin recently hit a brief peak above $1,000 and is up 102 percent over the past 12 months.

The Winklevoss brothers did not immediately respond to a request for comment

"Overall, this is a low probability event with a very significant upside," Bogart said of the ETF. "Ultimately, while it appears there is significant pent-up demand from the investment public for such a vehicle, bitcoin itself certainly doesn't need an ETF and will continue on regardless of the SEC's decision."

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