As the wait for the approval of Exchange-Traded Funds (ETF) on Bitcoin has been a topic of great interest, this article analyzes the SEC decision to delay its decisions on the proposals submitted by Valkyrie, Fidelity, Invesco and WisdomTree, and many others, shedding light on the implications and reasons for these delays.
Recently, the US Securities and Exchange Commission (SEC) once again extended the time to make crucial decisions on the fate of spot Bitcoin ETFs.
Summary
The SEC’s announcement on the approval delay of Bitcoin ETFs, including Fidelity’s
The SEC, an authority that has never given the green light to a cryptocurrency-based ETF, has delayed its decision on proposed spot Bitcoin ETFs until at least mid-October.
The decision was announced in official SEC documents, citing the need for additional time to fully evaluate the proposals.Â
According to the documents, the SEC chose to extend the 45-day decision period to ensure a full review of the proposed regulatory changes and related concerns.
Interestingly, the SEC did not provide specific reasons for the delay in its documents. This lack of explicit reasons leaves industry experts and stakeholders to speculate on the factors influencing the regulator’s decision-making process.
This delay marks the beginning of a series of deadlines for the SEC to address plans submitted by Invesco, WisdomTree and Valkyrie within a 240-day time frame.
In addition, the SEC was expected to respond to similar requests from other spot Bitcoin ETFs before Labor Day weekend.Â
Proposals from major players such as BlackRock, Fidelity, Bitwise and VanEck are on the SEC’s agenda for the end of the week.
The SEC’s decision to extend the evaluation of the proposals of WisdomTree, Valkyrie and Invesco was not entirely unexpected.
This delay follows a similar pattern to the postponement of the SEC’s decision on a fund proposed by Ark Invest and 21Shares last month.
In that case, the regulator announced that it would “initiate proceedings” to determine the feasibility of starting the trading of Ark 21Shares’ Bitcoin ETF, in addition to soliciting public opinions.
BlackRock’s ETF also delayed
BlackRock, the world’s largest asset manager overseeing more than $8.5 trillion in assets, has been anxiously awaiting approval to launch its iShares Bitcoin Trust exchange-traded fund (ETF) in the United States.
However, on 31 August, the US Securities and Exchange Commission (SEC) announced a delay in the decision-making process for BlackRock’s Bitcoin ETF application.
In June, BlackRock filed its application for a Bitcoin-based ETF, with Coinbase as custodian for the fund’s Bitcoin assets and Bank of New York Mellon responsible for managing the fiat accounts.
The application emphasized the benefits of such an ETF, particularly in simplifying access to Bitcoin for investors while avoiding the complexities and operational challenges of direct Bitcoin investments.
This delay in the approval of BlackRock’s ETF follows the recent move by Grayscale Investments, a cryptocurrency asset manager, which successfully petitioned the SEC to reconsider its earlier decision denying the Grayscale Bitcoin Trust (GBTC) price on 29 August.
The cryptocurrency community followed BlackRock’s request closely, as the approval of a Bitcoin spot ETF backed by the world’s largest asset manager could represent a significant step forward in the adoption of cryptocurrencies.
However, the SEC’s decision to delay BlackRock’s application, like that of other Bitcoin ETFs, means that the regulator will have another 45 days, after publication in the Federal Register, to approve, reject, or further delay the application.
This extends the timeline for BlackRock’s long-awaited ETF to at least 17 October, increasing the uncertainty surrounding the cryptocurrency ETF landscape.
Conclusions
Many industry observers, who are eagerly awaiting Bitcoin ETF approvals, believe that a positive outcome is more likely later this year or even in 2024.
This sentiment was further reinforced when analysts at Bloomberg Intelligence increased the odds of spot Bitcoin ETF approval by the end of 2023 from 65% to 75%.
This adjustment came on the heels of Grayscale Investments’ victory in its lawsuit against the SEC in the Washington Circuit Court of Appeals earlier this week.
The SEC’s decision to delay its decisions on the proposals by Valkyrie, Fidelity, Invesco and WisdomTree until at least mid-October indicates the cautious approach taken by the regulator in considering the introduction of spot Bitcoin ETFs.
The lack of explicit reasons for these delays leaves room for interpretation, and it remains to be seen what impact these postponements will have on the cryptocurrency market.
As the cryptocurrency sector continues to evolve, market participants will await with interest further developments on the road to potential Bitcoin ETF approvals.
