Latest news on the Bitcoin ETF: amid approval delays and future prospects

Latest news on Bitcoin ETF: possible launch delay was recently indicated following SEC approval. A total of 12 fund managers have filed with the US SEC for a spot ETF on Bitcoin, with the first phase of SEC evaluation beginning yesterday. 

In addition, according to Bloomberg ETF analysts James Seyffart and Eric Balchunas, there is an eight-day period between 9 November and 17 November during which the SEC could grant approval to all 12 spot ETF on Bitcoin. See below for all the details. 

Bitcoin ETF delays and prospects: analysis of SEC approval

With the opening of the window for US Securities and Exchange Commission (SEC) approval regarding the spot ETF on Bitcoin, analysts note that although the SEC grants approval, there will be a delay of about a month before the actual launch.

The expected launch delay, should the SEC potentially grant approval, is due to the complex two-step process to launch an ETF. 

In fact, to launch an ETF on Bitcoin, an issuer must obtain SEC approval from both the Trading and Markets Division for its 19b-4 filing and the Corporate Finance Division for its S-1 prospectus.

The main focus of the Corporate Finance division is on details of fund transactions and risk disclosure.  So far, out of twelve applications for Bitcoin ETFs, nine issuers have submitted revised prospectuses showing that they have communicated with Corporate Finance. 

In addition, analysts believe the launch of the Bitcoin ETF could be delayed if the SEC approves the 19b-4 applications before the prospectus documents are finalized.

According to Bloomberg ETF analyst James Seyffart, even if 19b-4 is approved, S-1 approval could take weeks or months between approval and actual launch.

The SEC has an eight-day window, from 8 November to 17 November, to approve the first spot ETF on Bitcoin. 

Although industry professionals raise the odds of approval to 90%, they believe it will take time, perhaps until early next year, before approval is final.

Recall that the SEC previously extended the deadline for comments on the Bitcoin spot ETF to 8 Novmebr for the consultation period.

We also recall that the rush to ETFs on Bitcoin in the United States began when the world’s largest asset manager, BlackRock, filed its application. 

Although Fidelity and other asset managers have also made applications for ETFs on Bitcoin, most have suffered rejections or withdrawn their applications. 

The 2023-2024 cycle has led many market observers to predict a likely approval of the Bitcoin ETF, estimating the chances at 90%.

SEC considers approval of all 12 Bitcoin ETFs

As anticipated, the US Securities and Exchange Commission could approve all twelve pending spot exchange traded fund (ETF) applications on Bitcoin (BTC) within the next eight days.

According to Bloomberg ETF analysts James Seyffart and Eric Balchunas, the SEC has a window of time, starting 9 November in the US, to review and approve all 12 spot ETF documents on Bitcoin, including Grayscale’s conversion of the GBTC trust product, before 17 November. 

However, they stress that this is only a possibility. Seyffart, in particular, mentioned that the SEC has issued delay orders for a group of applications from BlackRock, Bitwise, VanEck, WisdomTree, Invesco, Fidelity, and Valkyrie simultaneously. 

On 8 November, Seyffart said on X (formerly Twitter) that “this is the first available window” after the confirmation of Grayscale’s court victory.

The reason for this short time window was because of the SEC’s comment period deadline, set for 8 November, regarding a group of pending documents related to spot ETFs on Bitcoin.

Although the comment period for three filings will restart on 17 November, including Global X Bitcoin Trust, Hashdex Bitcoin ETF and Franklin Bitcoin ETF, it means that the approval or rejection of these applications will not take place until 23 November at the earliest.

Although the deadline for acceptance of the 12 documents is 17 November, Seyffart indicated that the SEC could make technical decisions on nine of the 12 applications by 10 January. 

Moreover, although approval of a spot ETF on Bitcoin is not guaranteed, both Seyffart and Balchunas predict a 90% probability of approval by 10 January of the following year.

Grayscale in talks with SEC to transform GBTC into ETF on Bitcoin

According to a report by CoinDesk today, Grayscale, a well-known cryptocurrency manager, has begun discussions with the Securities and Exchange Commission (SEC) regarding its request to transform its GBTC trust product into a spot ETF on Bitcoin.

Sources familiar with the situation revealed that Grayscale has been in contact with both the SEC’s Division of Trading and Markets and Division of Corporate Finance after it won a legal victory against the regulator on 29 August.

We emphasize that as the perceived likelihood of approval of an ETF on Bitcoin has increased, optimism in the cryptocurrency market has risen, with Bitcoin rising more than 30% in the past three months. 

This surge has also positively affected other major assets. In fact, in the past month, Solana (SOL) has surged a remarkable 93% due to improvements in scalability, while Ripple (XRP) and Ether (ETH) have grown 36% and 20%, respectively.

Although many industry experts express confidence about an endorsement that could usher in an upcoming bullish market, some analysts doubt that such a surge will have a lasting impact.