The SEC has pushed back the 2024 deadline for Bitcoin ETF approval. This move follows years of examining how to incorporate the fast-changing crypto space into conventional financial markets.
In June, BlackRock and other companies applied for a Bitcoin ETF. This sparked fresh discussions about crypto ETFs and caught the attention of investors from different backgrounds.
BlackRock became stronger by teaming up with Coinbase, a crypto exchange. They did this to meet possible requirements set by the SEC for approving Bitcoin ETFs, like sharing surveillance information.
Cathie Wood, who leads ARK Invest, also joined in. They applied for a Bitcoin ETF called ARK 21Shares in May 2023. But the SEC’s decision to delay the approval process has made things uncertain. On August 11, the SEC delayed reviewing ARK Invest’s application for another 21 days. This was to hear what the public thinks about it.
Navigating Regulatory Terrain and Challenges Ahead
One big challenge is how the investment works. Some Bitcoin ETFs are tied to futures, giving a way to invest in Bitcoin without directly using exchanges. Others, like spot Bitcoin ETFs, involve holding actual Bitcoin in a fund for more direct investing.
Getting approval for a Bitcoin ETF from the SEC has taken a long time. Back in July 2013, the Winklevoss twins tried to get their Bitcoin Trust listed as a product on a stock exchange, but the SEC said no. This was because digital currencies were new and uncertain at that time.
Stuart Barton, who started Volatility Shares, talked about dealing with the SEC. He said smaller companies might have an advantage with spot crypto ETFs. Barton mentioned that big companies have followed the same procedures for years. He noted that although well-known companies have applied, they haven’t moved the discussion much further.
Key Players in the Industry and Their Expected Timelines
Big companies like Bitwise Asset Management, VanEck, WisdomTree, Invesco, Galaxy Digital, Fidelity, and Valkyrie are being watched by the SEC.
The SEC can take up to 240 days to decide on ETF applications. This made the decision on ARK Bitcoin ETF move to January 2024. For other companies, decisions could come in March 2024.
The SEC is careful about allowing spot crypto ETFs. This might be because the crypto market in the US is changing quickly and is not simple to handle. Even though it’s regulated, there’s still uncertainty, shown by the SEC’s actions against Coinbase, Binance, and Ripple.
Stuart Barton said, “Both sides will need to compromise a bit. The SEC might have to be more open-minded. Both the crypto side and the SEC will have to be more flexible.”
Power Dynamics and the Political Situation
Changes are on the way in how digital assets are regulated, with laws being considered to outline the roles of the SEC and Commodity Futures Trading Commission (CFTC). This could transform the rules for cryptocurrencies. A recent case where the SEC took on Ripple ended with XRP not being labeled as a security. This shows the need for clearer rules in the crypto world.
Experts think there’s about a 65% chance that the SEC will approve spot Bitcoin ETFs. This might be because BlackRock is involved. Cathie Wood and Grayscale also suggest that the SEC could approve many ETF applications at once. This way, things would be fair and no one company would have an unfair advantage.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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