SEC Postpones Spot Bitcoin ETF Ruling for BlackRock, Invesco, and Bitwise

Key Takeaways

• Spot Bitcoin ETF applications from BlackRock, Valkyrie, and Bitwise have their review time extended by the SEC.
• The regulatory delay, prompting more public comments, extends the approval process, echoing delays in late August.
• BlackRock’s application represents a significant step by established financial behemoths towards accepting BTC.

The Securities and Exchange Commission (SEC) of the United States has once more delayed making a decision on a number of applications for spot Bitcoin exchange-traded funds (ETFs), including those from the cryptocurrency-focused Bitwise and the financial behemoths BlackRock and Invesco.

SEC Constantly Delaying ETF Decisions

These delays have occurred earlier than anticipated, according to multiple submissions made on September 28. This has surprised several applicants who had anticipated hearing back from the securities regulator between October 16 and 19.

The timing of these delays is directly related to the likelihood of a U.S. government shutdown on October 1 if Congress is unable to reach an agreement on a number of financing bills for federal operations.

In order to prevent this shutdown, Congress currently has to approve 12 different full-year spending measures by the end of September. The operation of numerous federal agencies, including financial regulators like the SEC, would be hampered by the prospective closure.

The SEC has previously delayed judgments regarding Bitcoin ETFs. When the first deadline drew near in late August, there was a previous round of delays.

The third set of deadlines for these seven companies are anticipated for approximately mid-January, however there is a chance that these dates may be postponed. The SEC must make a decision by no later than the middle of March.

BlackRock, Invesco, Bitwise and Valkyrie did not immediately respond to a request for comment.

Expectations on More Delays

The petitions from Fidelity, VanEck, and WidsomTree are also likely to be delayed, predicts  James Seyffart, a Bloomberg ETF analyst.

Seyffart explains that the delays result from the impending potential U.S. government shutdown, slated for October 1. This shutdown could impact the nation’s financial regulators and various other federal institutions.

The House and Senate have not reached a consensus on several crucial funding bills required to sustain government operations. To avert a shutdown, Congress must approve 12 different full-year spending bills by October 1.

Optimism Surges Regarding Bitcoin Spot ETF Approval

The likelihood of approving a Bitcoin ETF has grown in recent months. By the end of 2023, there is a 75% chance, up from a 65% chance in August, that an approval for a spot Bitcoin ETF would arrive, according to Bloomberg ETF analyst Eric Balchunas.

The U.S. Court of Appeals Circuit’s resounding decision in favour of Grayscale over the SEC, which suggested a more hospitable atmosphere for such approvals, fed this hope. By the end of 2024, Balchunas had even increased the odds to 95%.

The lack of clarity and investor protection are the main reasons the US SEC hasn’t yet approved any Bitcoin spot ETFs.