The Securities and Exchange Commission on Tuesday delayed its decisions regarding spot bitcoin ETF applications from two asset-management firms, delaying the process for a potential approval.
The regulatory agency punted on filings from Global X and Cathie Wood’s Ark Investment Management well before the mandated deadlines. ARK’s filing, which is a joint application with 21Shares, was due Nov. 11., and the Global X deadline was set for Oct. 7.
The agency noted in its filing that Jan. 10 will be the last day to delay Ark’s application.
The SEC has already delayed a host of applications in late August as the agency faces increasing pressure to approve a variety of digital-asset ETF products. The SEC allows ETFs that track bitcoin futures contracts, but it has blocked firms from rolling out funds that track physical bitcoin.
The agency has denied more than 30 applications for spot bitcoin funds since 2021 on the grounds the product isn’t safe for investors.
“Historically, the SEC has extended the timeline to review bitcoin applications because they’re relatively complex, and so the fact that they’ve taken that time is not surprising,” said Matt Hougan, chief investment officer of Bitwise Asset Management.
Pressure to Approve Bitcoin ETF
The SEC’s decision comes as a group of lawmakers sent a letter to the SEC Chairman Gary Gensler urging him to approve the investment vehicle on Sept. 26.
“A regulated spot bitcoin ETP would provide increased protection for investors by making access to bitcoin safer and more transparent,” wrote a group of congressmen, including U.S. Reps. Mike Flood (R-Neb.) and Ritchie Torres (D-N.Y.).
“Congressmen are representing people in America who want the ability to access a low cost regulated vehicle for accessing crypto and so expressing that can only be additive,” Hougan said.
Grayscale Investments won a watershed lawsuit against the SEC on Aug. 29., when the U.S. Court of Appeals D.C. Circuit unanimously decided that the SEC had to review the firm’s bid to convert its Grayscale Bitcoin Trust into an ETF. While investors celebrated the court victory, the SEC is proving that a so called “spotcoin” has a long road ahead before hitting the market.
In addition to delaying the filings, the SEC acknowledged a variety of digital-asset ETF applications earlier than expected, leading some to wonder if the premature actions are related to an anticipated government shutdown.
“100% convinced that the looming shut down that’s pushing all this stuff out,” said Bloomberg analyst James Seyffart on X, formerly known as Twitter.
Spot Bitcoin Battle Heats Up
As firms jockey for the coveted for position, many are looking for creative ways to convince the SEC that the market is ready for a spot bitcoin.
Most recently, Bitwise filed a nearly 40-page amendment to its application outlining rebuttals to the SEC’s claims that a spot bitcoin ETF is conducive to market manipulation and doesn’t offer investor protections.
“In this third application, and in the research we filed, we were just trying to answer [the SEC’s] questions to the best of our ability—we live, sleep and breathe this market 24/7, 365,” Hougan said.
Contact Lucy Brewster at lucy.brewster@etf.com.
