- The U.S. SEC has deferred its verdict on WisdomTree’s application for a spot Bitcoin ETF, adding it to a list of delayed decisions that includes asset management titans like BlackRock and Fidelity.
- The postponement arrives amid a heightened demand for crypto-based financial products and follows a recent court win by Grayscale Investments against the SEC.
Uncertainty Lingers Over Bitcoin ETF Landscape
In a landscape hungry for regulatory clarity, the United States Securities and Exchange Commission (SEC) has decided to prolong the industry’s wait by extending its decision-making period on WisdomTree’s application to launch a spot Bitcoin Exchange-Traded Fund (ETF). This deferral transpires in the wake of escalating calls for such investment vehicles, underscored by Grayscale Investments’ recent legal triumph against the SEC.
The SEC, which is currently wading through a deluge of similar applications, disclosed its decision in an official document, stating the need for a
“longer period of commission action on the proposed rule change.”
This news isn’t solely confined to WisdomTree. Investment powerhouses such as Invesco, Valkyrie, and Galaxy have also encountered similar delays in their respective quests for ETF green lights.
This rescheduling is agnostic to the eventual stance the SEC will adopt. WisdomTree initially filed its application on December 8, 2021. Following a tumultuous journey colored by regulatory complexities, the company decided to refile on June 19, 2023. It thereby joins an elite cadre of financial institutions like BlackRock, Fidelity Investments, and Bitwise that are also vying to introduce similar products into the market.
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When filing its application, WisdomTree had expressed its intent to utilize an independent pricing source for valuing its Bitcoin assets, keen on providing investors exposure to Bitcoin with minimized expenses. The SEC had a 45-day timeframe, originally ending on September 4, 2023, to render its verdict, but has now chosen to extend this regulatory deadline.
Amid this climate of regulatory hesitation, Matt Hougan, the Chief Investment Officer of Bitwise, has been vocal about urging the SEC to approve all pending Bitcoin ETF applications. He posits that such a blanket approval would be in the best interests of investors. However, Hougan acknowledges the unpredictable nature of the regulatory landscape, wherein the SEC’s ultimate decision could still swing toward rejection.
While the entire crypto ecosystem was anticipating a favorable verdict as the decision week approached, the SEC’s decision to delay puts the industry in a state of prolonged uncertainty. This extends the SEC’s timeline, now aligned with existing public comment periods and feedback loops, pushing the new deadlines for most applicants to mid-October 2023. The SEC’s delay mechanism is not an isolated case; it fits into a historical pattern of exhausting all available regulatory intervals before reaching a conclusive stance.
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