SEC Set to Announce Decision on 7 Bitcoin ETFs Application Early Next Week

Jimmy Aki
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The U.S. regulator is set to make decisions regarding Fidelity, BlackRock, Bitwise, and other entities after initially postponing its ruling on the proposed ARK 21Shares Bitcoin ETF.

However, experts believe the SEC’s approval, denial, or further delay of these applications can shape the entire crypto and digital finance landscape.

SEC Likely to Delay Bitcoin ETFs Proposal to Cool Waters

The spot Bitcoin ETF application saga takes a more intense turn this week as the U.S. Securities and Exchange Commission (SEC) is expected to announce its ruling on recent filings from seven traditional investment firms.

These firms include Fidelity, BlackRock, VanEck, Bitwise, WisdomTree, Invesco, and Valkyrie.

According to a recent report by Bloomberg, the SEC is expected to announce its decision, denial, or further delays on these proposals before the Labor Day weekend.

Specifically, Bitwise will learn of its SEC’s ETF rule on September 1, while Fidelity, BlackRock, VanEck, WisdomTree, and Invesco will await the regulator’s decision on their proposals by September 3.

Industry observers believe there’s growing concern over the SEC’s likely announcement of a further delay, which has the latest haven option.

On August 11, the SEC delayed 21Shares’s spot Bitcoin ETFs application with Ark Investment Management.

The regulatory agency stated in a filing that it plans to seek public comment on the amendment of proposals for the exchange-traded fund, effectively delaying a decision date. The process is touted to stretch further into 2024.

Roxanna Islam, the associate director of research and head of sector and industry research at VettaFi, told Bloomberg that there could be more delays from the SEC after ARK’s Bitcoin ETF filing.

However, Roxanna cited that the recent court ruling on the SEC rejection of the Grayscale Bitcoin ETF proposal may shape the landscape and lead to Grayscale being one of the first approved applications.

US Court Verdict on Grayscale Application Puts More Pressure on SEC

On June 29, 2022, the SEC rejected the Grayscale Investment application to convert its $13.5 billion Grayscale Bitcoin Trust ($GBTC) into exchange-traded funds (ETFs).

The SEC stated that its decision to deny the investment company application was due to failed answers on preventing fraud, market manipulation, and other rising concerns related to customer protection.

In response, the investment company announced it had sued SEC on the same day, requesting a petition for a review.

Grayscale implored the U.S. Courts of Appeals for the District of Columbia Circuit to review the SEC’s order.

Crypto communities were in approval of Grayscale litigation against SEC, as the regulatory reason for rejection was not comprehensive.

Additionally, the communities argued that approving the investment company’s proposal will make investing in Bitcoin more accessible and bring digital assets closer to the broader traditional financial markets.

On July 10, the investment firm announced its legal representatives filed a letter criticizing the SEC’s approval of leveraged Bitcoin-based ETFs amid denial of the company’s spot Bitcoin ETF proposal.

There was widespread celebration within global communities when the United States Court of Appeals ruled that the SEC’s rejection of Grayscale’s spot Bitcoin ETF application was deemed “arbitrary and capricious.”

While this doesn’t mean that the SEC must approve Grayscale’s application, it publicly states that the regulator’s rejection was baseless.

Roxanna, alongside analysts and case observers, believes the U.S. court ruling can pressure the SEC to approve Grayscale, BlackRock, and other proposals to maintain their high standards.

After a series of rejections of Bitcoin ETFs by the SEC, the U.S. court’s recent ruling against the Grayscale proposal rejection might be a clear message capable of influencing the agency to rule on filings.

Nevertheless, there will be much-needed clarity on the SEC’s stance on spot Bitcoin ETFs in the coming days. This will undoubtedly birth a new investment approach or understanding in the broader traditional finance space.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.