The U.S. Securities and Exchange Commission (SEC) has postponed its decision on approving the Ark 21Shares Bitcoin ETF. As a result, investors must continue to wait for regulatory guidance regarding the numerous applications for a spot-based Bitcoin ETF.
The SEC's deadline for a decision on the Bitcoin fund proposed by ARK Invest and 21Shares was August 13th. However, the regulatory authority announced on Friday that it intends to gather public comments on one of the proposed changes in the application. Consequently, the deadline for a decision on approval has been extended, likely delaying the evaluation process until 2024. Market participants' attention now shifts back to the upcoming decision dates for Bitcoin ETFs from BlackRock, Fidelity, WisdomTree & Co.
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The race for the first spot Bitcoin ETF is not over
An ETF is an exchange-traded fund that allows investors to engage in a portfolio of assets such as stocks, bonds, or commodities. Generally, there are two types that differ. Futures-based ETFs track the performance of underlying assets through futures contracts, while spot-based ETFs reflect the price movement of assets based on their actual market prices. Especially in the case of Bitcoin, futures-based funds have certain disadvantages for investors, as highlighted by CVJ.CH in its coverage of the first futures-based Bitcoin ETF in the U.S.
However, despite the approval of nine futures-based Bitcoin ETFs, the regulatory authority has not yet approved a spot product. Since the entry of the world's largest asset manager, the tide appears to be changing. In response to BlackRock's own application ("iShares Bitcoin Trust"), the SEC for the first time requested additional information regarding protection against market manipulation. In the same week as BlackRock, a handful of other providers submitted new applications. The authority must respond to these requests by September. Before the final deadline, the SEC can delay its decision three times.
Analysts anticipate approval of new crypto ETFs
Before the deadline for BlackRock's application, the decision on the first Ether ETF is pending. Many applicants such as Proshares, Bitwise, VanEck, and Valkyrie already operate Bitcoin ETFs based on futures. ETF experts at Bloomberg Intelligence are now observing similar patterns as seen just before the approval of the Bitcoin fund two years ago. Therefore, analysts estimate the likelihood of approval for the first Ether ETF to be over 75%.