SEC Delays Decision on Hashdex Spot Bitcoin ETF and Grayscale’s Ether Futures
The United States Securities and Exchange Commission has postponed its decision on the Hashdex spot bitcoin ETF application and Grayscale’s Ether futures filing. The agency has outlined that it will make a decision on the applications by the 1st of January, 2024.
SEC Decides It Needs More Time
The Securities and Exchange Commission has announced that it is delaying a decision on the application by Hashdex to convert its existing bitcoin futures exchange-traded fund (ETF) into a spot vehicle. The agency also stated that it was postponing a decision on Grayscale’s attempt to launch a new futures-based Ether ETF.
Hashdex applied to convert its bitcoin futures ETF into a spot bitcoin ETF back in September. Grayscale, a subsidiary of the Digital Currency Group, filed an application for an Ether futures ETF in the same month. Both filings initially had a deadline of the 17th of November for a decision. However, in response to Hashdex’s filing, the SEC stated it would take an additional 45 days to come to a decision, extending the deadline to the 1st of January, 2024.
“The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein.”
Hashdex’s proposal to convert an existing Bitcoin ETF into a spot vehicle stands out because the fund manager has suggested holding a mix of Bitcoin futures contracts, spot Bitcoin, and cash to avoid market manipulation risks. Other major institutions, including Fidelity and BlackRock, have also sought approval from the SEC to launch spot bitcoin ETFs of their own.
Ethereum Futures ETF Decision Delayed As Well
The SEC used similar language when explaining its decision to delay a ruling on a rule change related to Grayscale’s proposed Ethereum futures ETF in a separate filing. The commission added that a ruling in this case will also be made on the 1st of January, 2024. Grayscale filed for the ETF shortly after the SEC cleared the path for the first Ethereum futures ETF. Additionally, VanEck and ProShares have also launched Ethereum futures-based ETFs.
Anticipation For A Spot Bitcoin ETF Growing
The delays from the SEC come amidst increased anticipation and speculation of a spot bitcoin approval by the regulator. However, the SEC has rejected all efforts and applications to list such a product for the general investment community. Over a dozen institutions and asset managers have filed applications to launch spot bitcoin ETFs in 2023. Several others have also applied for similar products with exposure to Ether, which is the second largest cryptocurrency after Bitcoin.
The SEC has not yet indicated how it plans to rule on the latest batch of applicants. Previous rejections by the regulator raised concerns about market manipulation and a lack of surveillance-sharing documents. However, the applicants have stated that these concerns have been addressed or are no longer relevant after the approval of bitcoin futures ETFs, which was affirmed by an appeals court as well.
Hot Take: Uncertainty Continues as SEC Delays Decision on Bitcoin ETFs
The delays in the SEC’s decision-making process regarding the approval of spot bitcoin and Ethereum futures ETFs are prolonging the uncertainty in the crypto market. The postponement of the ruling until January 2024 has added to the anticipation and speculation about the future of these investment products. With the heightened interest from various institutions, the crypto community eagerly awaits the SEC’s final decision, which could significantly impact the market dynamics. The delay underscores the complex regulatory environment surrounding cryptocurrencies and their financial instruments, leaving stakeholders and investors in limbo as they await clarity on the future of these ETFs.
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