SEC Pushes Back Again on Spot Bitcoin ETF applications by BlackRock, Invesco, Bitwise and Valkyrie

Ahead of an anticipated U.S. Government shutdown on October 1, the Securities Exchange Commission (SEC) has delayed BlackRock’s application for a Spot Bitcoin Exchange Traded Fund (ETF). Invesco, Bitwise and Valkyrie have also had their applications deferred, two weeks ahead of the deadlines.

SEC chair Gary Gensler has recently stated that his agency would operate with minimal staff during a potential shutdown, and applications are unlikely to be processed.

Bloomberg Analyst, James Seyffart, who regarded these delays as a negative sign for other applications, pointed out that only VanEck, Wisdomtree and Fidelity now await decisions.

During a recent hearing at the U.S. House Committee on Financial Services, Gensler refused to confirm when or if the SEC would approve a Spot Bitcoin ETF. Prior to the hearing, a group of four Congressmen around Richie Torres had sent a letter to Gensler, urging immediate approval of the ETFs.

Meanwhile, the SEC has approved a Valkyrie Ether Futures ETF application, marking a significant milestone for Ethereum.

Bitwise Made Amendments

On September 25 Bitwise made a filing to amend its spot Bitcoin ETF application. The 40-page document responded to SEC objections to the initial Bitwise filing. Chief Investment Officer at Bitwise, Matt Hougan, noted that up until now most filings had thus far failed to provide fundamentally new insights into one of the SEC’s key concerns: inadequate surveillance of trading platforms to detect fraud and manipulation.

What’s Next for a Bitcoin ETF

Bloomberg analyst Eric Balchunas suggested that the odds of a Bitcoin ETF had improved following Grayscale’s legal victory against the SEC. Grayscale won a lawsuit against the regulator, where the judge instructed the agency to reconsider the company’s application for conversion of its Bitcoin trust into a Bitcoin ETF.

Before the recent delays Balchunas stated that their calculations indicated a 75% likelihood of a Spot Bitcoin ETF launching in 2023, and a 95% certainty for 2024.

Those odds would have changed considerably after the recent delays. The new deadlines for the delayed applications are now around mid-January 2024, with a final decision expected no later than March.