US SEC as usual delays all Bitcoin spot ETF resolutions. Could it still be approved?
US SEC delays Bitcoin spot ETF resolutions, approval still possible?
Compilation: Felix, LianGuaiNews
On August 31st, according to documents, the U.S. SEC delayed the decision on rule changes proposed by Fidelity (Wise Origin), VanEck, WisdomTree, and Invesco, all of which plan to issue bitcoin spot ETFs through the BZX exchange under Cboe (Chicago Board Options Exchange). Applications from Valkyrie Investments and BlackRock (iShares) were also delayed. These two companies intend to issue ETFs through Nasdaq. Another delay involves Bitwise, which plans to launch its ETF through NYSE Arca.
Most decisions delayed until October 17th
Documents show that the U.S. SEC has postponed the new deadline for making decisions on the applications from WisdomTree, Invesco Galaxy, Wise Origin, VanEck, and BlackRock to October 17th. The decision on Valkyrie is delayed until October 19th, and the decision on Bitwise is delayed until October 16th.
Bitcoin falls in response
As a result of this news, according to CoinGecko data, the price of Bitcoin continued to decline, reaching $26,077.99 as of 12:00 on September 1st (Beijing time), a decrease of 4.1% in the past 24 hours. The previous increase in Bitcoin due to the news of Grayscale’s victory in the SEC lawsuit was wiped out.
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Why the delay?
Similar to previous delays, the U.S. SEC stated in the latest batch of documents that the extension was to “have sufficient time to consider the proposed rule changes and the issues raised therein.”
It is reported that the regulatory agency has a total of 240 days from the date of the initial review of the application to make a final decision of approval or denial. SEC staff traditionally use all possible periods of comments and review to delay making a final decision until the 240-day period ends. Therefore, this delay is also in line with expectations. Currently, the regulatory agency has at least 45 days to process these proposals, and then the U.S. SEC can approve, reject, or further delay its decision.
Approval is still possible
The latest batch of bitcoin spot ETF applications and proposed rule changes are widely considered to have a good chance of being approved. BlackRock, which manages over $9 trillion in assets, made headlines in June when it applied for a bitcoin spot ETF. As one of the first applicants in this round of proposals, favorable factors for BlackRock’s proposal include the company’s high success rate with past ETF proposals (note: BlackRock has had 575 ETFs approved by the SEC and only one rejected) and its proposed bitcoin spot ETF relying on Coinbase’s monitoring sharing agreement.
It was because of BlackRock’s application that other companies that had previously attempted to launch similar products resubmitted their applications. Therefore, some believe that if BlackRock is approved, all similar applications will be approved.
In addition, on August 29th, the District of Columbia Circuit Court made a favorable ruling for Grayscale, stating that the SEC’s refusal to issue a bitcoin spot ETF for Grayscale was unreasonable and that it adopted a dual standard for bitcoin spot and derivatives products without explaining the necessity of such a dual standard, and demanded that the SEC reprocess Grayscale’s request. Bloomberg ETF analyst James Seyffart stated that although this does not mean that GBTC will automatically convert to an ETF, it does bring the approval of a bitcoin spot ETF one step closer. The CEO of Grayscale stated that it is still uncertain whether it will be necessary to resubmit the application for a bitcoin spot ETF to the SEC and that attention should be paid to the court’s final authorization.
Currently, it is unclear whether the US SEC will be able to delay making a decision again when the next deadline arrives. However, previous Bitcoin spot ETF applications by the aforementioned companies have been rejected by the SEC. If the SEC decides to reject the latest round of ETF proposals in October, the applicants may submit new applications, starting the cycle of approval, delay, and rejection once again.