The American Watchdog Bides Its Time
A flurry of activity swept across the cryptocurrency markets this week as the US stock market watchdog delayed its decisions on Bitcoin ETF launch applications from major players like Invesco and BlackRock.
A Storm Brewing in the Crypto World
This Thursday, the Securities and Exchange Commission (SEC) opted to extend the timeframe for its verdict on the approval of several Bitcoin ETF launches from firms, including Invesco, WisdomTree, and Valkyrie.
These applications were submitted following the mid-June proposition by asset management giant BlackRock. The hope? That their applications would gain traction if the American behemoth’s request saw green lights. A BlackRock spokesperson has since confirmed to financial news outlets that the SEC has indeed postponed their Bitcoin ETF request.
Longer Than Expected: The Waiting Game
While these firms were hoping for an answer from the SEC as early as next week, signals now hint at the likelihood of a decision only around October 17th. The SEC stated, “The Commission finds it suitable to designate a longer period to act upon the proposed rule change to have ample time to review the proposed rule change and the issues raised therein.”
For context, an ETF, or Exchange Traded Funds, is an index fund traded on stock exchanges. It mirrors the movement of a stock market index or multiple financial assets, tracking both the highs and lows of these indices or assets.
To date, the SEC has only given a nod to Bitcoin futures ETFs, not the spot Bitcoin ETFs. Their reasoning? They believe that “futures are tougher to manipulate since the market draws from future prices at the Chicago Mercantile Exchange (CME), which is regulated by the Commodity Futures Trading Commission (CTFC),” as highlighted by financial sources.
Bitcoin Takes a Dive
The SEC’s recent announcements have undoubtedly thrown a spanner in the crypto market works. Within a day, Bitcoin’s price plummeted by over 5.5%, trading around $23,900 by Friday morning, as per CoinMarketCap data.
This development comes on the heels of a US court siding with asset manager Grayscale in a lawsuit against the SEC regarding the launch of a spot Bitcoin ETF—a decision that had previously rocketed Bitcoin’s price to $28,000 on Wednesday.
Conclusion
As the crypto world continues to intersect with traditional finance, the moves of regulators like the SEC become even more paramount. This delay underscores the careful consideration being given to the emerging digital asset class, particularly the Bitcoin ETFs. While the postponement may bring short-term market volatility, it also highlights the importance of due diligence in this rapidly evolving financial landscape. All eyes remain fixed on what the SEC’s eventual decisions will mean for the broader crypto industry and how these determinations will shape the future of digital asset trading.
