The United States Securities and Exchange Commission (SEC) has announced a delay in its decision on several proposals for spot Bitcoin (BTC) exchange-traded funds (ETFs), including BlackRock, ahead of an anticipated government shutdown. The applications of Invesco, Bitwise, and Valkyrie were also delayed, according to separate filings made on September 28. Analyst James Seyffart from Bloomberg ETF expects the applications from Fidelity, VanEck, and WidsomTree to also be pushed back by the SEC.
These delays come two weeks earlier than the scheduled second deadline date for many applicants. The applicants were originally expecting to hear a decision from the securities regulator between October 16 and 19. Seyffart suggests that the timing of the delays is related to the potential government shutdown expected to occur on October 1. This shutdown would disrupt the operations of financial regulators and other federal agencies.
Currently, both chambers of Congress, the House and Senate, have been unable to agree on funding bills to finance government operations. In order to avoid a shutdown, Congress needs to pass 12 separate full-year funding bills by October 1.
This is not the first time the SEC has delayed Bitcoin ETF applicants. In late August, the SEC delayed a group of spot Bitcoin ETF applicants when the first deadline was approaching. The third set of deadlines for the seven firms falls around mid-January, but these deadlines could potentially be delayed as well. Ultimately, the SEC will have to make a final decision by mid-March at the latest.
In late August, Bloomberg ETF analyst Eric Balchunas estimated that the probability of a spot Bitcoin ETF being approved by the end of 2023 had increased to 75%, up from an earlier estimate of 65%. Balchunas cited the recent unanimous decision of the U.S. Court of Appeals Circuit in Grayscale’s court win over the SEC as the main reason for the increased odds. Balchunas further raised the odds to 95% by the end of 2024.
These delays in the approval of spot Bitcoin ETFs could impact the cryptocurrency market and potential investors. However, analysts remain optimistic about the future of Bitcoin ETFs, predicting a potential approval in the coming years. As the SEC continues to review the applications, market participants will be eagerly awaiting a final decision that could shape the future of Bitcoin trading in the United States.