SEC Delays Spot Bitcoin ETF Applications; Next Deadline in Oct

The United States Securities and Exchange Commission (SEC) was expected to make some concrete decisions on spot Bitcoin ETFs filed by some traditional finance firms. Prominent TradFi firms such as BlSackRock, Fidelity Investments, Valkyrie, Invesco, Wisdomtree, and several others were awaiting the response. However, the regular delays the applications of exchange-traded funds. 

SEC delayed the applications of the firms in separate filings on August 31, 2023. Following the recent update, the regulator has put the ETF application from the biggest asset management company, BlackRock, on delay. It filed with the SEC for its iShares Bitcoin Trust in June this year. Crypto exchange Coinbase was appointed as custodian for the Bitcoin holdings of the proposed fund while Bank of New York Mellon would take care of fiat accounts. 

In addition to BlackRock, spot ETF applications from other traditional finance companies were also reported to be delayed by the SEC in a filing. This includes filings from WisdomTree, Invesco and Galaxy, VanEck, Bitwise, Valkyrie, and Fidelity. 

The SEC will have another 45 days upon publication in the Federal Register to consider the proposed rule changes allowing the listing of the investment vehicles, giving the regulator until October to approve, deny, or delay a decision.

BlackRock’s filing explained the significance of these shares in addressing the challenges posed by the intricacies and operational complexities associated with making a direct investment in Bitcoin.

Grayscale Win Against SEC Paves Way for Bitcoin ETF

The delay in the ETF approval took place after the court’s decision in favor of Bitcoin fund manager Grayscale which applied to turn its fund into a spot BTC ETF. The SEC rejected the application for listing of their over-the-counter Grayscale Bitcoin Trust (GBTC). So, the asset manager moved to the court seeking legal intervention. 

The U.S. Federal court’s ruling on August 29th mandated the SEC to review Grayscale’s request to convert its Bitcoin Trust into an ETF. This development has led many experts to believe that the chances of approval for at least one spot crypto ETF have substantially improved.

There is speculation that the SEC might grant approval for a spot Bitcoin ETF in the United States for the first time, following a significant court case loss against Grayscale. 

The delay took place just before the first deadline date for the financial watchdog to update ETF applications. 

SEC Delays Spot Bitcoin ETF Applications; Next Deadline in Oct

However, now with the delay coming into the picture, the SEC has a window of 45 days that could make the second deadline in October 2023. 

SEC Delays Spot Bitcoin ETF Applications; Next Deadline in Oct

The update of ETFs delay did not work in favor of Bitcoin and the response came within no time. Bitcoin price fell 5% in the last 24 hours dropping up to $25,788 before settling down at the current price of $26,040, according to CoinMarketCap.

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