As the United States Securities and Exchange Commission (SEC) faces upcoming deadlines to decide on seven spot Bitcoin exchange-traded fund (ETF) applications, analysts are contemplating various scenarios following the recent court ruling in favor of Grayscale Investments.
Key Decision Deadlines: Critical ETF Decision Dates
The SEC is facing a series of key deadlines for deciding on seven spot Bitcoin ETF applications. Bitwise’s ETF fate will be revealed on September 1, followed by BlackRock, VanEck, Fidelity, Invesco, and Wisdomtree on September 2 (1). Valkyrie’s application decision is expected on September 4. These deadlines come in the wake of the SEC’s defeat to Grayscale Investments in a U.S. federal appeals court.
Implications of the Grayscale Ruling: Grayscale’s Influence on Future Approvals
The recent U.S. Court of Appeals ruling that termed the SEC’s rejection of Grayscale’s application as “arbitrary and capricious” is believed to increase the odds of success for the upcoming applicants. Bloomberg ETF analyst James Seyffart suggests (2) that this ruling could positively impact the next wave of ETF applicants.
Uncertain Path Forward: SEC’s Potential Moves
The second potential avenue is to deny on reasons not used before/yet… which i have been saying for months could have to do with Custody or settlement of #Bitcoin which is not something that futures ETFs have to worry about. SEC has made a lot of noise around custodians
— James Seyffart (@JSeyff) August 29, 2023
The SEC now has 90 days to decide whether to appeal the recent court ruling. Analysts are unsure of the regulator’s next steps. If the SEC doesn’t appeal, it will need to specify the execution of the ruling, which could include approving Grayscale’s application or reconsidering it. There are two potential scenarios for the SEC: either conceding and approving Grayscale’s conversion of GBTC to a Bitcoin spot ETF, or revoking the listing of Bitcoin futures ETFs.
Balancing Regulatory Decisions
While some consider revoking Bitcoin futures ETFs highly unlikely, given the SEC’s apparent openness to Ethereum futures ETFs, the agency will need to navigate the complexities of its decisions while considering the growing interest and developments in the cryptocurrency space.
