SEC has put on hold Fidelity, Invesco & Galaxy, VanEck, Bitwise, WisdomTree, Valkyrie Digital Assets, and the Blackrock ETF applications until October.
The U.S. Securities and Exchange Commission (SEC) has postponed approving WisdomTree, Wise Origin, VanEck, Bitwise, Invesco Galaxy and Valkyrie Digital Assets and Blackrock ETF applications, all of which were filed earlier this year. The agency’s decision, as disclosed in official filings on Thursday, extends the timeline for a determination until October.
In response to this development, Bitcoin (BTC), already experiencing a notable decline earlier in the day, witnessed a further drop in value. Over the past 24 hours, it has registered a 4.1% decrease, with its current price at $26,100.
This delay has added an element of uncertainty to the crypto market as investors eagerly await the SEC’s verdict on the proposed crypto ETFs, which many believe could pave the way for increased institutional involvement in the digital asset space.
The collective aim of these applicants is to pioneer the launch of the very first spot Bitcoin ETF in the US. A product like the BlackRock ETF could eliminate the complexities of setting up a cryptocurrency wallet or directly purchasing Bitcoin, making digital asset investment more accessible to a broader spectrum of investors
If history is an indication, change is hard to come by.
Grayscale was shot down by the SEC for its spot Bitcoin ETF although it managed to get a legal win. On August 29, 2023, in a highly-anticipated decision, the U.S. Court of Appeals for the District of Columbia Circuit vacated the Commission’s decision. The three-judge panel unanimously concluded that the Commission failed to provide a “coherent explanation” as to why it approved Bitcoin futures ETFs, but not the proposed Bitcoin spot ETF, and therefore acted “arbitrarily and capriciously” and in violation of the Administrative Procedure Act.
The SEC has its reasons for being reluctant to approve crypto ETFs; it cites insufficient monitoring of trading activities that could leave the underlying crypto ETF spot market subject to fraud and manipulation.
But like all disruptive technologies, crypto ETFs must be regulated well and not shunned. In light of the recent legal win and support by entrepreneurs worldwide, there seems to be light at the end of the tunnel for the crypto market.