Bitcoin ETFs: The Exciting Hour of Regulatory Tipping Points
Recently, several major firms have made headlines by pushing their spot Bitcoin exchange-traded fund (ETF) applications through the grueling regulatory gauntlet. And if receiving the thumbs-up from the Federal Register were an Olympic sport, these firms would be in the running for a gold medal.
The List of Applicants
According to the latest updates, as of July 19, applications from giants like BlackRock, Fidelity, Invesco Galaxy, VanEck, and WisdomTree are officially in the Federal Register. This is important because it brings them a step closer to potential approval or the infamous, “hard pass” from the SEC.
Understanding the Process
Now, the SEC has a precious 45-day window to make a decision. However, if they decide to take their sweet time—because who doesn’t want to drag things out?—that period can extend all the way to 240 days, which brings us dangerously close to March 2024. During this time, the SEC can choose to:
- Accept the proposal
- Reject the proposal
- Extend the deadline
- Open the application up for public comments
What’s Changed?
Prior to getting their act together, firms realized that last-minute adjustments were necessary. One major tweak was involving cryptocurrency exchange Coinbase as a surveillance-sharing partner. It’s as if they suddenly realized that sharing is caring, especially when dealing with the SEC’s earlier feedback that their applications were lacking substance.
The Current State of Affairs
It’s worth mentioning that until now, the SEC has yet to green-light any spot investment vehicle that provides direct exposure to cryptocurrencies like Bitcoin. Since 2021, they’ve been handing out approvals for ETFs linked to Bitcoin futures. In fact, a new leveraged Bitcoin futures ETF was launched recently, intensifying the pressure on the SEC to make a decision.
What Happens Next?
While the SEC wrestles with their decision, they’re also under a microscope for their recent enforcement actions against crypto entities like Binance and Coinbase. So it’s safe to say, “All eyes are on the SEC” as they navigate this messy intersection of crypto regulation and rapid innovation.
