September 1, 2023
By Sharan Kaur Phillora
The United States Securities and Exchange Commission (SEC) is bracing for a critical week, with decisions on seven spot Bitcoin exchange-traded fund (ETF) applications expected by September 4. This comes in the wake of a recent loss for the SEC against Grayscale Investments in the U.S. Court of Appeals.
Here’s what we know:
According to official SEC filings, Bitwise Asset Management will know the fate of its Bitcoin ETF application on September 1. Following closely, BlackRock, VanEck, Fidelity, Invesco, and WisdomTree are also awaiting determinations for their respective funds, slated for September 2. Valkyrie Investments will be the last to hear back from the SEC on September 4.
The SEC’s defeat against Grayscale on August 29 has added a new layer of intrigue to these pending decisions. The U.S. Court of Appeals ruled that the SEC’s refusal to transform Grayscale’s Bitcoin Trust (GBTC) into a spot Bitcoin ETF was “arbitrary and capricious.” Although this doesn’t mandate the SEC to approve either Grayscale’s application or those in the pipeline, it certainly ups the ante.
James Seyffart, a Bloomberg ETF analyst, stated in an August 29 interview that Grayscale’s victory “definitely” increases the likelihood of favorable outcomes for the new applicants. Nevertheless, he emphasized that the SEC could further delay its decisions; it has two more proposed deadlines for each fund before having to reach a final verdict on the 240th day post-filing.
As for the SEC’s strategic options after its legal setback, it has 90 days either to file an appeal with the U.S. Supreme Court or apply for an en banc review, in which a full circuit court could overturn the earlier ruling. Yet, the SEC has yet to clarify its next steps.
Seyffart proposed two plausible courses for the regulator: either capitulate and approve Grayscale’s conversion to a Bitcoin spot ETF or formulate a new rationale to deny the application. He added that revoking existing Bitcoin futures ETFs was “highly unlikely,” especially considering the SEC’s reported openness to Ethereum futures ETFs.
The next week promises to be pivotal, not only for the future of digital asset management but also for the SEC’s own regulatory stance toward cryptocurrency ETFs.
About the author
Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.
