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- The third deadline for the SEC’s ruling on the Ark 21Shares Bitcoin trust application was due by November 11, thus leaving the agency with a final date of October 01, 2024.
- Market experts believe the SEC could also delay the other spot Bitcoin ETF application – including for BlackRock, Bitwise, VanECK, Wisdomtree, Fidelity, and Valkyrie – as regulators in Congress formulates clear digital assets regulations.
The United States Securities and Exchange Commission (SEC) continued to disapprove of the application of spot Bitcoin exchange-traded fund (ETF) as the current Chair Gary Gensler finds different reasons to possibly deny it. Notably, the United States SEC delayed the ruling of the application of ARK 21Shares Bitcoin ETF despite having about six weeks before the set deadline. However, the SEC will finally be forced to approve a Bitcoin spot ETF following its earlier decision to approve a Bitcoin Futures product.
Moreover, a three-judge panel of the District of Columbia Court of Appeal earlier this month ruled that the SEC was wrong to reject a proposed Bitcoin ETF without explaining its reasoning. According to the SEC Chair, digital assets are still prone to market manipulation, and money laundering is a major concern. However, the SEC trapped itself in the Grayscale case after it failed to show how the Bitcoin futures market is different from the spot industry with Coinbase Custody Trust Company acting as the Trust’s custodian.
Expert’s Take on SEC’s Delay on Approving ARK 21Shares Bitcoin ETF
According to a popular ETF analyst with Bloomberg, James Seyffart, the decision by the United States Securities and Exchange Commission to delay the ruling on the ARK 21Shares Bitcoin ETF application is likely to be reciprocated by other applicants. With several spot Bitcoin ETF applications having their second deadline for the SEC’s decision in mid-October – including the one by BlackRock, Bitwise, VanEck, Invesco, Wisdomtree, Fidelity, and Valkyrie – Seyffart highlighted the hopes for approval before the end of this year have significantly faded.
This may put the hammer down for any hopes of an ETF approval this year? If they went on Ark/21 shares already, we may see delays on all the other filings today too? BlackRock, Bitwise, VanEck, Invesco, Wisdomtree, Fidelity & Valkyrie a all due in mid Oct … pic.twitter.com/XiFbxIrIRK
— James Seyffart (@JSeyff) September 26, 2023
With the US court having demonstrated not to lean on the SEC in its bid to regulate the crypto asset industry by enforcement, Congress has significantly stepped up its bid to provide clarity in the nascent industry. For instance, four members of the House Financial Services Committee wrote a joint letter to the SEC Chair asking for immediate approval of Bitcoin ETFs. This is an indication that institutional investors have been pushing regulators to facilitate Bitcoin ETF approval ahead of next year’s presidential election.
Four members of the House Financial Services Committee wrote to the SEC today asking them to approve spot Bitcoin ETFs "immediately" pic.twitter.com/nZiQMcdHdA
— Alistair Milne (@alistairmilne) September 26, 2023
Market Outlook
The move by the SEC to delay a Bitcoin spot ETF comes at a time when the underlying value hovered around $26k. However, institutional investors have continued to accumulate more coins in preparation for the imminent approval of spot Bitcoin ETF. For instance, MicroStrategy, which has many investors including Blackrock, recently acquired about 5.4k Bitcoins despite the looming bearish outlook.
