The United States Securities and Exchange Commission (SEC) has announced a delay in its decision on several proposals for spot Bitcoin exchange-traded funds (ETFs), which include applications from prominent firms like BlackRock, Invesco, Bitwise, and Valkyrie. This delay, disclosed in separate filings on September 28, comes ahead of an expected government shutdown.
The postponement also affects applications from Fidelity, VanEck, and WisdomTree, according to Bloomberg ETF analyst James Seyffart, who anticipates that these applications will face similar delays by the SEC.
This latest delay arrived two weeks before the originally scheduled second deadline, which was set for many applicants who had been anticipating feedback from the SEC between October 16 and 19.
The timing of these delays is closely tied to the potential U.S. government shutdown, which is looming on October 1. Such a shutdown could disrupt the functioning of the country’s financial regulators and other federal agencies. The House and Senate have yet to reach agreements on various funding bills to support government operations, with Congress needing to pass 12 separate full-year funding bills by October 1 to avoid a shutdown.
Notably, the SEC previously delayed a group of spot Bitcoin ETF applicants in late August as the first deadline approached.
Looking ahead, the third set of deadlines for the seven firms in question is around mid-January, but it remains possible that these deadlines could also be extended. Ultimately, the SEC must make a final decision on these ETFs by no later than mid-March.
In late August, Bloomberg ETF analyst Eric Balchunas raised the probability of a spot Bitcoin ETF being approved by the end of 2023 to 75%, up from an earlier estimate of 65%. He attributed this increase to the decisive nature of the U.S. Court of Appeals Circuit’s ruling in favor of Grayscale over the SEC. Balchunas even went as far as raising the odds to 95% by the end of 2024. These delays and potential approvals underscore the growing interest and regulatory progress surrounding cryptocurrency-based financial products in the United States.