November 16, 2023 at 11:33 GMTModified date: November 16, 2023 at 11:34 GMT
November 16, 2023 at 11:33 GMT

SEC stalls deciding on Hashdex spot Bitcoin ETF application

The SEC is taking time as it continues to stay indecisive on applications related to exchange-traded funds (ETFs).

SEC stalls deciding on Hashdex spot Bitcoin ETF application

The US Securities and Exchange Commission (SEC) is taking time as it continues to stay indecisive on applications related to exchange-traded funds (ETFs).

The regulatory watchdog has now delayed a decision on Hashdex’s application to convert its existing Bitcoin ETF into a spot vehicle. The world’s leading crypto asset manager Grayscale’s application for a new futures-based Ether ETF has also been met with the same fate.

Both Hashdex and Grayscale had filed their respective applications in the month of September. Their initial deadlines for a decision were marked as 17 November, which the SEC has now extended, according to a pair of Wednesday filings.

Franklin Templeton is another Bitcoin ETF applicant which also had a 17 November deadline for decision. However, it will have to wait until 2024, along with other companies.

The delay doesn’t come as a surprise as the regulator is notoriously known for doing the same with multiple other applications. Recently, there has been quite some anticipation for a spot Bitcoin ETF being approved by the federal regulator.

This also managed to drive a bullish uptrend for $BTC, which rose in price to touch a key level at $37,000. At the time of press, it was changing hands for $37,369, up by almost 5% in the last 24 hours.

Though the SEC has so far rejected multiple applications to list such a product for the general investing public, companies in the sector have not been shy of submitting applications. The regulator now faces over a dozen filings to launch spot Bitcoin ETFs in this year.

Several firms, like Grayscale, have also applied for similar products exposed to Ether which is the second-largest cryptocurrency by market capitalisation.

Back in September, the Commission had delayed its verdict on several proposed Bitcoin ETFs, including the ones by major players like Valkyrie, Fidelity, Invesco, and WisdomTree. As per official documents, the move was motivated by the need for more time to thoroughly evaluate the proposals.

A recent report published by Coinbase (COIN) expressed its opinion that an approval of spot Bitcoin ETF would introduce cryptocurrencies to a broader investor base.

According to its analysts, such a product would open the crypto market to a new classes of investors which include registered investment advisers (RIAs), retirement funds and institutions that have historically not been able to access the asset class.

Its head of institutional research, David Duong, said that the opportunity would potentially be more than just new money accessing the sector. The ETFs will “ease the restrictions for large money managers and institutions to buy and hold Bitcoin, which will improve liquidity and price discovery for all market participants”, he added.

On top of this, being an investment vehicle that meets all of the compliance requirements while getting the green light from regulators might also open the door to new products. This could multiply the existing crypto offerings for accredited investors and expand adoption, Coinbase said.

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