The U.S. Securities and Exchange Commission (SEC) has extended the deadline for four Bitcoin exchange-traded funds (ETFs) by 45 days, citing the need for additional time to review the proposals. The four ETFs are sponsored by Ark Invest, Global X, Valkyrie, and WisdomTree.
What are Bitcoin ETFs?
Bitcoin ETFs are investment products that track the price of Bitcoin and trade on stock exchanges. They allow investors to gain exposure to Bitcoin without having to buy, store, or manage the cryptocurrency directly. Bitcoin ETFs are seen as a way to boost the adoption and legitimacy of Bitcoin, as well as to provide more liquidity and transparency to the market.
Why is the SEC delaying the decision?
The SEC has been reluctant to approve Bitcoin ETFs in the past, citing concerns over market manipulation, fraud, custody, and investor protection. The agency has rejected several Bitcoin ETF proposals over the years, and has not yet approved any in the U.S. The SEC has the authority to extend the review period of a proposed rule change for up to 240 days, and can also initiate proceedings to determine whether to approve or disapprove the proposal.
The SEC said in its notices that it needed more time to consider the comments received from the public, as well as to evaluate the consistency of the proposed rule changes with the requirements of the Securities Exchange Act of 1934. The SEC also invited further comments from interested parties on the proposals.
When is the new deadline?
The new deadline for the SEC to make a decision on the four Bitcoin ETFs is as follows:
- Ark Invest Bitcoin ETF: November 14, 2023
- Global X Bitcoin Trust: November 21, 2023
- Valkyrie Bitcoin Fund: December 8, 2023
- WisdomTree Bitcoin Trust: December 11, 2023
What are the chances of approval?
The chances of approval for the four Bitcoin ETFs are uncertain, as the SEC has not indicated any clear stance on the issue. However, some analysts and industry experts are optimistic that the SEC will eventually approve a Bitcoin ETF, given the growing demand and innovation in the space, as well as the regulatory developments in other countries.
For instance, Canada has already approved several Bitcoin ETFs, which have attracted significant inflows and trading volumes. Moreover, the SEC has recently approved a Bitcoin futures ETF, which is expected to launch in October. A Bitcoin futures ETF is different from a Bitcoin ETF, as it does not hold Bitcoin directly, but rather contracts that bet on the future price of Bitcoin. A Bitcoin futures ETF may be seen as a less risky and more compliant option by the SEC, as it relies on the regulated futures market, rather than the unregulated spot market.
However, a Bitcoin futures ETF may also have some drawbacks, such as higher fees, tracking errors, and contango effects, which could erode the returns for investors. Therefore, some investors may still prefer a Bitcoin ETF that holds Bitcoin directly, as it may offer lower costs, better accuracy, and more exposure to the underlying asset.