The United States Securities and Exchange Commission (SEC) is facing critical deadlines to make decisions on seven new Bitcoin (BTC) spot exchange-traded fund (ETF) applications. These deadlines come on the heels of the SEC’s defeat to Grayscale Investments in a U.S. federal appeals court. The latest deadline is set for September 4, with Bitwise awaiting the SEC’s decision on September 1, while BlackRock, VanEck, Fidelity, Invesco, and Wisdomtree will all be waiting for the SEC’s decision by September 2, according to SEC filings.
Another applicant, Valkyrie, will hear back from the SEC on September 4. This marks a crucial moment for these investment firms as they await the SEC’s approval, which could pave the way for Bitcoin ETFs.
The U.S. Court of Appeals recently ruled in favor of Grayscale on August 29, suggesting that the SEC’s rejection of Grayscale’s application to convert its Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF was “arbitrary and capricious.” However, this victory does not guarantee approval for Grayscale’s or other ETF applications in the future, according to Bloomberg ETF analyst James Seyffart.
In a recent Bloomberg interview, Seyffart explained that while Grayscale’s win increases the likelihood of a successful outcome for the next wave of applicants, it remains uncertain when that day may come. The SEC has the power to delay its decisions and has two more proposed deadlines for each fund before being forced to make a final decision on the 240th-day post-filing.
For the awaiting applicants, the final deadlines with the SEC are all set for mid-March next year.
Following the ruling in favor of Grayscale, the SEC now has 90 days to file an appeal with the U.S. Supreme Court or apply for an en banc review. The latter refers to a full circuit court’s ability to overturn a ruling made by a three-judge panel. However, the SEC has not clarified its next move yet.
If the SEC chooses not to appeal, the court will need to specify how the ruling is executed, which may include instructing the SEC to approve Grayscale’s application or revisit it.
According to Seyffart, the regulator has two viable options. The first is to concede defeat and approve Grayscale’s conversion of its GBTC to a Bitcoin spot ETF. The second is for the SEC to revoke the listing of Bitcoin futures ETFs entirely or deny Grayscale’s application based on a new argument. However, fellow Bloomberg ETF analyst Eric Balchunas considers the latter option highly unlikely, given the SEC’s reported openness to Ethereum futures ETFs.
These developments have sparked interest and excitement within the crypto community, as it represents a potential breakthrough for Bitcoin ETFs. The outcomes of these upcoming decisions by the SEC will play a vital role in shaping the future of Bitcoin investment and regulation in the United States.