Bitcoin ETF Countdown: SEC Decisions Before Labor Day

Bitcoin ETF Countdown: SEC Decisions Before Labor Day

The anticipation for a potential Bitcoin Exchange-Traded Fund (ETF) has led to a journey filled with uncertainty and challenges. This week, pivotal decisions are on the horizon as the crypto community eagerly awaits the unfolding of events. The US Securities and Exchange Commission (SEC) is gearing up to address applications from major players in the crypto investment realm, including Bitwise, BlackRock, VanEck, WisdomTree, and Invesco. With Bitwise's application up for consideration on Friday and the others following suit, the SEC's response is likely to be unveiled before the upcoming Labor Day weekend.

Despite the hopes of the crypto faithful, analysts and industry observers anticipate that the SEC might once again opt for delay rather than a definitive decision. The regulator's history includes delaying 21Shares' spot-Bitcoin application and rejecting numerous similar requests over the past decade. Roxanna Islam, associate director of research and head of sector and industry research at VettaFi, believes that further delays are in the cards. She emphasizes the importance of a decision regarding Grayscale's lawsuit, suggesting that the SEC might prioritize approving Ether-futures ETF filings over spot-Bitcoin ETFs. The pursuit of a spot-Bitcoin ETF has been a longstanding desire within the crypto community and beyond.

Advocates argue that it would democratize Bitcoin investment, making it accessible to everyday investors and bridging the gap between digital assets and traditional financial markets. However, regulatory concerns of fraud and manipulation have hindered its approval. The rejection of Grayscale Investments' Bitcoin trust-to-ETF conversion plan underscored these concerns. The company's subsequent lawsuit against the SEC seeks to overturn a decision perceived as arbitrary and discriminatory, given the approval of ETFs tracking Bitcoin futures. Elliott Stein, senior litigation analyst at Bloomberg Intelligence, projects a 70% likelihood of Grayscale winning a ruling to reverse the SEC's rejection order, implying the potential for regulatory change. BlackRock's entry into the ETF race injected momentum into the pursuit. Its established track record in launching ETFs raised expectations that applications from BlackRock and others could stand a better chance of approval this time.

Moreover, the excitement surrounding potential ETFs has emboldened companies to explore not only Bitcoin ETFs but also more unique investment vehicles. Ether-futures and Bitcoin-and-Ether-futures-medley funds have emerged, with the SEC poised to permit Ether-futures funds to start trading in October, a development viewed as a win for the industry. As the decision-making moment approaches, Bitcoin's price continues to fluctuate. After reaching an all-time high of nearly $69,000 in late 2021, the cryptocurrency traded around $26,100 on Monday, down from its mid-July peak of nearly $31,000. In the midst of these market dynamics and regulatory deliberations, the fate of Bitcoin ETFs hangs in the balance, and the crypto community watches with bated breath for the SEC's decision.

Back to blog