(Bloomberg) – Bitcoin ETF candidates faced another dose of disappointment as U.S. regulators set to make a decision on such a product on Friday. But the next time they hear from them, they may be just a few weeks away.
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The U.S. Securities and Exchange Commission has until September 1 to come to a conclusion on the Bitwise Bitcoin ETP Trust, according to a report by Bloomberg Intelligence. Regulators can deny, approve, or delay. Decisions on applications from BlackRock, VanEck, WisdomTree and Invesco are expected just a day later, with others following closely behind.
Crypto supporters are keeping an eye on the dates amid expectations that this time around, unlike previous attempts, an exchange-traded fund that invests directly in Bitcoin could get the green light from regulators. Many were particularly pleased at the fact that BlackRock, the leading asset management company, has put its name in the running – it has a near-perfect record of launching ETFs.
Still, the path to a potential spot fund was neither easy nor quick.
“We fully expect these decisions to be delayed,” said James Seyffart, an analyst at Bloomberg Intelligence. “The only thing that could possibly change that view is if we make a ruling in Grayscale’s lawsuit against the SEC, and even then it’s likely we’d see a delay by those deadlines as well.” Grayscale is suing SEC for trying to convert their Bitcoin trust into an ETF.
Many in the crypto community — and fans outside — have been yearning for a spot Bitcoin ETF for years. They argue that not only would this make investing in Bitcoin more accessible to regular investors, but it would also help bring the digital asset space closer to traditional financial markets. On the other hand, the supervisory authorities keep citing fraud and manipulation as reasons for not approving such a product. Founded by brothers Tyler and Cameron Winklevoss, Gemini became the first company to attempt a physically-backed Bitcoin ETF with a 2013 filing. It was rejected by the SEC.
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But the recent excitement has encouraged issuers to try not only Bitcoin ETFs but also more exotic vehicles. A number of companies have submitted filings for ether futures or bitcoin and ether futures medley funds. Such ETFs are not currently traded in the US, and earlier this year the SEC rejected trials for ether futures ETFs.
Another potentially positive signal that the SEC is softening its stance on crypto ETFs could be the launch of the Volatility Shares 2x Bitcoin Strategy ETF (ticker symbol BITX), according to Coinbase Bytes’ newsletter. This fund launched in June and has amassed more than $20 million in assets. It was the first of its kind to go on sale.
The SEC initially has 45 days to rule on spot fund applications. Another 45 days follow, then 90 and then 60, so a total of 240. A decision must be made within 240 days, said Seyffart.
Many market observers are also expecting a further delay in September.
“The baseline scenario for the ETF application has to be that the administrators do what they have for years and use all their powers to delay the decision,” said Stephane Ouellette, managing director of FRNT Financial, an institutional platform with a focus on digital assets. “Even if these products were eventually approved, it would be very surprising if they were approved as soon as possible.”
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