US SEC Delays Decision for Seven Spot Bitcoin ETFs, BTC Price Crashes 4%
On Thursday, august 31, the U.S. Securities and Exchange Commission (SEC) announced its decision to delay a total of seven spot Bitcoin ETF applications filed by giants like BlackRock, WisdomTree, Valkyrie, VanEck, and others.
Referring to the proposed WisdomTree fund, the SEC said: "The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein”.
The SEC will have an additional 45 days, starting from the publication in the Federal Register, to review the proposed rule changes that would allow the listing of investment vehicles. This extension means the regulator has until October to either approve, deny, or postpone a decision.
These delays came after speculation arose that the SEC might greenlight a spot Bitcoin ETF in the United States for the first time. This speculation was prompted by a significant court ruling in favor of asset manager Grayscale. On August 29, an appellate court mandated that the SEC reevaluate Grayscale's request to transform its Bitcoin Trust into an ETF. As a result, many experts have suggested that the chances of at least one spot cryptocurrency ETF receiving approval have notably increased.
Soon after the SEC’s announcement on Thursday, the Bitcoin price tanked by over 5% taking a dip under $26,000. With this, the BTC price lost all of its gains made after the Grayscale’s victory earlier this year. Analysts state that Bitcoin lacks enough catalyst to continue with the price movements going ahead. Thus, the selling pressure can continue further and Bitcoin can retest the support at $25,000.
For years, advocates of cryptocurrencies have contended that the introduction of a spot Bitcoin fund would be advantageous for investors and could further integrate the industry into the realm of traditional finance. They argued that such a product would simplify the process for money managers to invest in cryptocurrencies on behalf of their clients. Moreover, it would signify a level of maturity for the relatively young cryptocurrency industry, which has faced skepticism since its inception and has been engaged in ongoing regulatory battles.
It’s difficult to gauge the actual impact that a spot Bitcoin ETF would bring after going live. However, some market analysts believe that this could lead to considerable institutional inflows to the tune of billions of dollars.