The US Securities and Exchange Commission (SEC) has delayed its final decisions on Bitcoin spot ETF applications, affecting a diverse range of candidates, from industry giants like BlackRock and Fidelity’s Wise Origin to crypto-specific entities like VanEck and Bitwise. This decision has caused Bitcoin, which was already declining, to drop by 4.1% in the past 24 hours, now stabilizing around $26,000.
Regulatory hesitations: an in-depth examination of delays and deferrals
According to recent filings with the SEC, the agency has chosen to extend comment periods and defer any firm commitments, thus allowing for a greater scope of public reactions. New deadlines have been set: October 17 for Wise Origin, Galaxy, and WisdomTree, and two days later for Valkyrie, with Bitwise facing a deadline on October 16. Traditionally, the SEC’s staff has used the full 240-day review window to deliberate, making the agency’s recent actions unsurprising to those closely following regulatory affairs.
The court of appeal adds another layer to regulatory complexity
Earlier this week, the D.C. Circuit Court of Appeals criticized some of the SEC’s reasoning for rejecting Bitcoin ETF applications as being “arbitrary and capricious.” This followed an argument by Grayscale that the SEC lacked solid grounds to reject its proposal to convert the Grayscale Bitcoin Trust into an ETF. The court highlighted the SEC’s inconsistency between approving BTC futures ETFs and denying spot BTC market ETFs, despite an almost perfect correlation in the prices of the underlying market.