The Securities and Exchange Commission (SEC) in the United States has decided to postpone the decision regarding the introduction of a Bitcoin-based ETF. These applications, submitted by prominent financial institutions, are awaiting approval, while the cryptocurrency world anxiously watches the unfolding events.
Major financial institutions, such as BlackRock, Invesco, and WisdomTree, are keenly watching the SEC’s recent moves in the United States. All seven applications concerning Bitcoin-based ETFs have been postponed. This wait is not surprising, especially after Grayscale’s earlier difficulties this year.
On Thursday, August 31, information about the postponement of the decision appeared on the SEC’s official website. SEC Chairman, Gary Gensler, has repeatedly expressed his concerns about the potential fraud risks in the cryptocurrency sector and the need to protect investors. In the published documents, we read:
“The Commission found it appropriate to designate a longer period to take action regarding the proposed rule change so that it has enough time to consider the proposed change and the issues related to it.”
The situation developed after a significant victory by Grayscale in its dispute with the SEC. The US appellate court invalidated the SEC’s previous decision to refuse Grayscale’s GBTC product change to an ETF. The court deemed the decision as “arbitrary and capricious” since the commission did not justify differences in treating similar products. It’s worth noting that ETFs based on Bitcoin futures were approved in 2021.
There’s no doubt that introducing a Bitcoin-based ETF would benefit investors. It would facilitate financial institutions’ participation in the cryptocurrency market.
After the earlier verdict regarding Grayscale, Bloomberg analysts stated that there’s a 75% likelihood of introducing a Bitcoin-based ETF by 2023. They also believe that by 2024, the USA will have such a product.
There’s no shortage of Bitcoin enthusiasts eagerly awaiting the emergence of a Bitcoin-based ETF product. In their opinion, such funds have the potential to generate significant returns, reaching tens of billions of dollars.
As the financial world increasingly intertwines with technology, expectations for the future of Bitcoin ETFs are rising. Will the SEC consider the applications anytime soon? The cryptocurrency industry eagerly awaits the regulator’s next steps.
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