Frustration continues to mount for crypto enthusiasts eager to see a spot Bitcoin ETF in the United States. The Securities and Exchange Commission (SEC) has once again pumped the brakes on progress, announcing further delays in decisions regarding applications from Franklin and Globe X. Is the dream of an easily accessible Bitcoin ETF fading, or is this just another hurdle in a long race? Let’s dive into the details.
Another Delay? What Happened?
In documents released on November 17th, the SEC revealed it needs more time to consider the spot Bitcoin ETF proposals from financial giants Franklin and digital asset investment firm Globe X. You can view the official documents here: Franklin Filing and Globe X Filing.
This news isn’t entirely unexpected. Franklin and Globe X were somewhat later to the ETF application party compared to some competitors, so their timelines were naturally extended. However, this deferral adds to the growing sense of impatience surrounding spot Bitcoin ETF approvals in the US.
Why the Continued Hesitation from the SEC?
The SEC’s reluctance to greenlight spot Bitcoin ETFs isn’t new. They’ve consistently voiced concerns, primarily revolving around:
- Market Manipulation: The SEC worries about the potential for manipulation in the Bitcoin market, which is less regulated than traditional securities markets.
- Lack of Surveillance-Sharing Agreements: The regulator wants to ensure there are adequate surveillance-sharing agreements in place with exchanges trading Bitcoin to detect and prevent fraudulent activities.
- Market Structure Issues: As highlighted by BitGo CEO Mike Belshe, unresolved issues within the market structure of Bitcoin trading are still seen as significant obstacles by the SEC.
These concerns have led to repeated rejections and delays, despite a surge in applications. In 2023 alone, over a dozen firms have thrown their hat in the ring for spot Bitcoin ETFs, and now, attention is also turning to similar products based on Ether, the second-largest cryptocurrency.
Read Also: SEC Delays Hashdex Nasdaq Ethereum ETF Application To Next Year
Are These Concerns Still Valid?
Applicants argue that the SEC’s worries are becoming outdated, especially considering the evolution of the crypto market and the approval of Bitcoin futures ETFs. Their key arguments include:
- Maturity of the Bitcoin Market: The Bitcoin market has matured significantly since the early days, with increased liquidity and more robust infrastructure.
- Bitcoin Futures ETF Precedent: The SEC has already approved Bitcoin futures ETFs. Applicants argue that if futures-based products are acceptable, spot ETFs, which directly hold Bitcoin, should also be.
- Court Support: An appeals court even sided with Grayscale earlier this year in their legal battle with the SEC over a spot Bitcoin ETF rejection, indicating a potential shift in judicial perspective.
Despite these arguments and growing industry pressure, the SEC remains cautious, continuing to delay final decisions.
No Immediate ETF Relief in Sight
The delays for Franklin and Globe X are not isolated incidents. The SEC is taking a similarly cautious approach across the board. Adding to the list of postponed decisions, the agency also recently delayed:
- Hashdex’s Bitcoin ETF Conversion: Hashdex sought to convert its existing Bitcoin futures ETF into a spot Bitcoin ETF, but this decision has also been pushed back.
- Grayscale’s Ether Futures ETF: Grayscale’s proposal for a new Ether ETF based on futures contracts has also been deferred. You can find details on this delay here.
Both Hashdex and Grayscale had initial deadlines of November 17th for their Bitcoin ETF conversion applications, but the SEC has opted for more time. This widespread pattern of delays suggests a systemic approach from the regulator, rather than isolated concerns about specific applications.
The Waiting Game Continues
For now, the US spot Bitcoin ETF remains elusive. While the SEC acknowledges the growing interest in cryptocurrency-based investment products, its priority remains investor protection and market integrity. Whether the arguments from applicants and the pressure from the industry will eventually sway the SEC remains to be seen. Crypto investors and market observers will have to continue playing the waiting game, hoping that the regulatory tide will eventually turn in favor of spot Bitcoin ETFs.
Disclaimer: The information provided is not trading advice. Bitcoinworld.co.in holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.
Disclaimer: The information provided is not trading advice, Bitcoinworld.co.in holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.