BTC ETF Delays: Regulatory Outlook
The decision regarding the spot Bitcoin BTC exchange-traded funds (ETFs), including those proposed by BlackRock, has been tactfully postponed by the United States Securities and Exchange Commission due to considerations related to a possible government shutdown. This temporary delay coincided with a momentary dip in BTC tickers, reaching a level of $26,971.
Furthermore, the SEC has thoughtfully chosen to defer the assessment of spot Bitcoin ETF applications submitted by Invesco, Bitwise, and Valkyrie, as clearly indicated in separate filings on September 28. An insightful analysis from James Seyffart, an analyst at Bloomberg ETF, hints at the likelihood of similar deferments for applications from Fidelity, VanEck, and WidsomTree, as regulatory caution takes precedence.
Interestingly, this recent delay has come earlier than the previously stipulated second deadline, leaving the applicants in a state of heightened anticipation. The applicants, who had initially expected responses between the time span of October 16 to 19, find themselves amidst a slightly prolonged period of uncertainty.
Seyffart provided astute insights, suggesting that these judicious delays are aligned with the potential U.S. government "shutdown" projected to unfold on October 1. This eventuality could cause a notable disruption in the operations of the country's esteemed financial regulators and critical federal agencies.
It's worth noting that both the House and Senate find themselves embroiled in a funding-related impasse, necessitating the expeditious passage of 12 separate full-year funding bills by October 1 to avert an undesirable shutdown.
As a matter of precedent, the SEC had judiciously decided to defer the review of several spot Bitcoin ETF applicants in late August, a prudent move considering the nearing first deadline.
Anticipating the future, the third set of deadlines for these seven firms conveniently falls around mid-January, although it's prudent to acknowledge the potential for these to encounter similar delays. The SEC, bound by regulatory protocols and rigorous review procedures, will need to arrive at a definitive conclusion no later than mid-March.
In late August, Eric Balchunas, a discerning analyst from Bloomberg ETF, intriguingly estimated a 75% probability of approval for a spot Bitcoin ETF by the conclusion of 2023. This was a notable uptick from the previously estimated 65%, attributed primarily to the decisive and unanimous judgment rendered by the U.S. Court of Appeals Circuit in Grayscale’s recent legal triumph over the SEC. Balchunas, reflecting optimism, has remarkably elevated the odds to an impressive 95% by the close of 2024.
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