SEC puts BlackRock, Valkyrie, and Bitwise Bitcoin ETFs on hold
The U.S. Securities and Exchange Commission has delayed its decisions on several bitcoin exchange-traded fund (ETF) proposals, leaving many in the crypto industry feeling pessimistic for any future blessing from the agency.
SEC filings earlier this week indicated the securities regulator would give itself until January to make decisions on ETFs filed by Ark 21Shares and GlobalX. The latest round of delays includes bitcoin ETF applications from BlackRock, Valkyrie, and Bitwise.
The SEC initially delayed its decision on these funds on August 31. Additionally, Hashdex’s bitcoin ETF decision, which was expected around October 6, was also postponed.
The delays are seen as an effort to address potential disruptions caused by an expected government shutdown. SEC Chair Gary Gensler recently warned that a shutdown would leave the regulator with a “skeletal” staff.
BlackRock’s bitcoin ETF application is highly anticipated, given its status as a $9 trillion asset manager with a strong track record of SEC approvals. Analysts suggest that BlackRock’s approval rate with the SEC stands at roughly 575-1.
As of now, U.S. investors have access to bitcoin futures ETFs, which invest in bitcoin futures contracts rather than the digital currency itself. These ETFs involve agreements to buy or sell bitcoin at a predetermined price in the future.
The long-anticipated bitcoin spot ETF, on the other hand, would directly invest in physical bitcoin, allowing investors to gain exposure to the cryptocurrency without needing to hold and secure the digital asset themselves. As such, spot ETFs are expected to provide a more direct and straightforward way for investors to participate in the bitcoin market.
Following the US regulators’ reluctance to approve a spot bitcoin ETF, many applicants have turned their focus to products offering exposure to the crypto futures market, bitcoin miners, or companies hold crypto on their balance sheets.
SEC Chair Gary Gensler said that he would be open to approving a bitcoin-futures ETF, but only under certain conditions. The revelation rankled some fund managers who were hopeful of a physically backed ETF but regulated like a normal exchange-traded fund under a 1933 law.
Six entities have filed applications with the agency for ether (ETH) futures-based exchange-traded funds (ETFs). The first application was submitted by Volatility Shares Ether Strategy ETF on July 28, followed by others such as Bitwise Ethereum Strategy ETF, VanEck Ethereum Strategy ETF, Roundhill Ether Strategy ETF, ProShares Short Ether Strategy ETF, ProShares Ether Strategy ETF, and Grayscale Ethereum Futures ETF by August 1.
Historically, the SEC has not approved any ETFs tracking Ethereum futures contracts, although numerous applications have been filed in the past. If the SEC does not deny these applications, the Ether ETFs could launch as early as October 12.