SEC Delays Decisions on Spot Bitcoin ETFs Amidst Anticipated Government Shutdown

• SEC delays decisions on major Bitcoin ETFs, including BlackRock, Invesco, Bitwise, and Valkyrie applications.
• Potential October 1 government shutdown fears intensify uncertainty, pushing SEC’s decision timeline forward by two weeks.
• Analysts, including Eric Balchunas, note increased optimism for Bitcoin ETF approval post-legal clarity.

In a recent development, the United States Securities and Exchange Commission (SEC) has announced delays in its decision on several proposals for spot Bitcoin exchange-traded funds (ETFs), impacting major players like BlackRock, Invesco, Bitwise, and Valkyrie. The decision comes ahead of an expected government shutdown, adding further uncertainty to the crypto investment landscape.

Bloomberg’s James Seyffart reported this news via X (previously Twitter):

The SEC filings on September 28 revealed that applications from Invesco, Bitwise, and Valkyrie have been pushed back, leaving industry analysts anticipating similar delays for proposals from Fidelity, VanEck, and WisdomTree. Bloomberg ETF analyst James Seyffart attributed the timing of these delays to the looming U.S. government shutdown, scheduled for October 1, which could disrupt the normal functioning of financial regulators and federal agencies.

These delays come two weeks earlier than the initially scheduled second deadline, causing additional anxiety for applicants who were expecting responses between October 16 and 19. Seyffart emphasized that the uncertainty stems from the lack of agreement in Congress on various funding bills crucial for government operations. By October 1, Congress needs to pass 12 separate full-year funding bills to avert a government shutdown.

This isn’t the first instance of SEC-induced delays in the approval process for spot Bitcoin ETFs. In late August, the SEC delayed decisions on multiple applicants as the first deadline approached. The next set of deadlines for the seven firms in question is in mid-January, with the possibility of further delays. The SEC is mandated to make a final decision by mid-March at the latest.

Analysts have been closely monitoring the regulatory landscape, with Bloomberg ETF analyst Eric Balchunas noting a shift in the probability of a spot Bitcoin ETF approval. Recently SEC has extended the deadline for considering the listing of ARK 21Shares’ Bitcoin ETF on Cboe BZX Exchange.

Following the U.S. Court of Appeals Circuit’s decisive ruling in Grayscale’s court victory over the SEC, Balchunas raised the odds of approval by the end of 2023 from 65% to 75%. He further heightened expectations, putting the likelihood at an impressive 95% by the close of 2024, citing the clarity provided by recent legal decisions as a pivotal factor in the increased optimism among industry observers.