SEC to rule on five Bitcoin ETFs before Labor Day weekend

The SEC is set to make imminent rulings on Bitcoin ETF applications from five firms, with decisions expected before the Labor Day weekend.

A cluster of filings for Bitcoin (BTC) exchange-traded funds (ETF) sits on the desk of the U.S. Securities and Exchange Commission (SEC), with decisions expected imminently—before the onset of the Labor Day holiday next week. Among the applicants are high-profile financial firms like Bitwise, BlackRock, VanEck, WisdomTree, and Invesco.

Bitwise’s submission is slated for review by Sept. 1, while the remainder have until the following day for their applications to be assessed. It is widely speculated that the SEC will render its judgments before the long weekend kicks off.

Prolonging decisions: A familiar tactic of the SEC?

Not many are optimistic about swift approvals. The SEC’s track record suggests a tendency for deferring decisions on crypto-related filings. Just earlier this month, the regulatory body postponed its judgment on a spot Bitcoin ETF application by 21Shares in partnership with ARK Investment Management. This tendency to delay is not new; multiple Bitcoin ETF applications have been denied or deferred over the years.

Last year, Grayscale Investments hit a roadblock in its quest to convert its Bitcoin trust into an ETF. The SEC cited vulnerabilities in the cryptocurrency markets, such as potential fraud and manipulation, as the rationale behind their decision. Grayscale subsequently filed a lawsuit, urging the U.S. Court of Appeals  to overturn what they termed an “arbitrary and discriminatory” ruling.

Experts and community members alike have long been clamoring for a spot-Bitcoin ETF. Such a financial vehicle, they contend, would not only democratize access to Bitcoin investments for the average individual but also bring cryptocurrencies a step closer to integration within mainstream financial systems.

“If the SEC has the latitude to defer, they probably will, at least until the court makes a ruling in the Grayscale case,” Elliott Stein, senior litigation analyst, said to Bloomberg Intelligence. Stein estimates the probability of Grayscale prevailing in court at 70%.

The changing landscape of Bitcoin ETFs

The “acceptance’ of BlackRock Bitcoin ETF’s filing this June has somewhat shifted the dynamics. Known for its almost positive history of launching ETFs successfully, BlackRock’s application has led some industry analysts to speculate that the odds for approval might be improving.

Furthermore, the space has witnessed a surge in applications not just for Bitcoin ETFs but also for more complex financial instruments like Ethereum (ETH) ETFs. Reports suggest that the SEC might green-light Ethereum ETFs for trading as early as October, a move that many interpret as a positive sign for the industry.