With little surprise, the US Securities and Exchange Commission (SEC) has once again postponed its decision on spot Bitcoin ETFs, this time for those proposed by Global X and Franklin Templeton. All eyes are now particularly on Ark Invest & 21 Shares’ Bitcoin spot ETF, whose final cut-off date is expected to be January 2024.
Bitcoin spot ETFs postponed again
Without too much surprise, we won’t know the name of the first Bitcoin spot ETF approved by the US Securities and Exchange Commission (SEC) today. Indeed, the US regulator has just rejected applications from Global X and Franklin Templeton, a few days after rejecting Grayscale’s application for a spot Ethereum ETF.
The SEC began requesting changes from issuers of Bitcoin spot ETF applications last September, resulting in some updates to the official documents filed with the regulator. Cathie Wood, Ark Invest’s CEO, said at the time that this was a “significant move” on the part of the SEC.
These comments from the US regulator include market manipulation risks, supervisory sharing arrangements and other issues often relating to investor safety.
More recently, Bloomberg analyst Eric Balchunas reported on X that the SEC’s Trading and Markets branch had opened up to dialogue with entities that had filed Bitcoin spot ETF applications through Form 19b-4s, including recommending that they make some modifications to their filings.
He points out that this is not “unexpected”, but a positive sign that the ETFs may be approved:
Hearing chatter SEC’s Trading & Markets engaged w/ exchanges this week on spot bitcoin ETF 19b-4s, is advising them they’d like the ETFs to do cash creates (vs in-kind), and has asked them to get in amendments in next couple wks. This isn’t unexpected but good sign nonetheless.
– Eric Balchunas (@EricBalchunas) November 17, 2023
While it’s not impossible that the SEC might reject one or more Bitcoin spot ETF applications entirely, this remains highly unlikely, especially since Grayscale’s victory over the regulator last August.
According to Eric Balchunas and James Seyffart, also analysts at Bloomberg and Bloomberg Intelligence, there is a 90% chance that some spot Bitcoin ETFs will be approved sometime in January 2024. In this respect, eyes are primarily on Ark Invest’s 21 Shares spot Bitcoin ETF, which has a final deadline of January 10, 2024.
