In a move that underscores the mounting uncertainty stemming from the ongoing Congressional deadlock, the United States Securities and Exchange Commission (SEC) has chosen to delay its verdict on numerous applications for spot Bitcoin exchange-traded funds (ETFs). This postponement affects prominent financial giants such as BlackRock, Invesco, Bitwise, and Valkyrie.
Initially scheduled for October 16-19, the SEC’s decision to defer the review process comes two weeks prior to the second deadline. Analysts posit that these delays are a direct consequence of the imminent threat of a government shutdown in the United States, slated for October 1 if Congress fails to pass the requisite funding bills.
The impasse in Congress regarding these bills has created a precarious environment for federal agencies, including the SEC. Bloomberg ETF analyst James Seyffart anticipates that similar delays may impede applications from Fidelity, VanEck, and WisdomTree.
Notably, back in late August, the SEC had already postponed a cluster of spot Bitcoin ETF applicants as the initial deadline loomed. The impacted companies now face a third set of deadlines around mid-January, which might potentially face further extensions. The SEC’s ultimate decision on these ETFs is mandated to materialize no later than mid-March.
Eric Balchunas, an ETF analyst at Bloomberg, has revised his projections concerning the approval of a spot Bitcoin ETF. Previously estimating a 75% probability of approval by the close of 2023, an increase from an earlier forecast of 65%, Balchunas attributes this heightened likelihood to the U.S. Court of Appeals Circuit’s resolute ruling in favor of Grayscale in its legal clash with the SEC.
Balchunas has now upped the odds to a striking 95% for approval by the conclusion of 2024. The SEC’s latest postponement may be construed as an indicator that regulatory clarity and approval for spot Bitcoin ETFs in the United States are increasingly plausible in the near future.
Market participants and cryptocurrency enthusiasts will keenly observe unfolding developments within both the SEC’s decision-making process and the ongoing Congressional negotiations. These events possess the potential to exert a substantial influence on the fate of the eagerly awaited Bitcoin ETFs.