The United States Securities and Exchange Commission, also known as the SEC, has decided to delay its decision on several proposals for Bitcoin exchange-traded funds (ETFs). This includes a proposal submitted by BlackRock. The reason behind this postponement is the anticipation of a government shutdown.
The SEC has deferred the consideration of spot Bitcoin ETF requests from Invesco, Bitwise, and Valkyrie. Separate filings were made on Sept 28 to outline this deferment. Furthermore, James Seyffart, an ETF analyst at Bloomberg, anticipates similar delays for applications submitted by Fidelity, VanEck, and WisdomTree as regulated by the securities regulator.
The recent postponements happened two weeks before the originally expected second deadline. This was when many applicants were anticipating responses from the securities regulator between Oct 16 and Oct 19.
Seyffart explained that these postponements are timed with the possibility of a U.S. government “shutdown” on Oct 1 in mind. This prospective shutdown can potentially disrupt operations for the country’s financial regulators and other federal agencies.
SEC Delays Spot Bitcoin ETF Reviews & Imposes New Deadlines
Currently, both the House and Senate of Congress have yet to reach an agreement on several crucial funding bills essential for government operations. To prevent a shutdown, the Congress must pass 12 separate full-year funding bills before Oct 1.
The SEC decided to postpone the review of several spot Bitcoin ETF applications in late Aug as the initial deadline approached. Additionally, the seven companies seeking approval are now facing mid-January deadlines, which might be subject to delays as well. The SEC must make a final decision no later than mid-March.
In late Aug, Eric Balchunas, an ETF analyst at Bloomberg, revised his estimate. He stated that the likelihood of a spot Bitcoin ETF receiving approval by the conclusion of 2023 had risen to 75%. This was an increase from his previous projection of 65%.
He attributed the increased odds to the unanimous and resolute decision made by the U.S. Court of Appeals Circuit in favor of Grayscale’s battle against the SEC. Following this, Balchunas subsequently raised the probability to 95% for a spot Bitcoin ETF approval by the conclusion of 2024.
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