SEC Delays Decision To Approve Bitcoin ETFs

( Backers of cryptocurrency will have to wait a little bit longer to find out whether they can invest in Wall Street-approved digital currency.

On Wednesday, the U.S. Securities and Exchange Commission announced in a filing that it would delay a decision on whether to “approve or disapprove, or institute proceedings to determine whether to disapprove” a Bitcoin exchange-traded fund. That decision will now not occur until June 17 at the earliest.

The SEC was set to rule on the matter on Thursday, but decided to delay its decision for now. The application the SEC has in front of it is from VanEck Associates Corp. It’s just one of 11 different issuers who are weighing a Bitcoin ETF.

There have been many efforts to formalize an ETF for Bitcoin and other cryptocurrency for the past 10 years. Now, though, it seemed much more likely than ever before that the SEC would approve a Bitcoin ETF to launch sometime this year.

Part of the reason for that optimism is that Gary Gensler, the new chairman of the SEC, has indicated he has a more open-minded approach to cryptocurrency. That led many investors to have a brighter outlook on Gensler’s approach than that of Jay Clayton, who preceded him in the role.

With Wednesday’s announcement that the final decision on a Bitcoin ETF will be delayed, though, it does seem to indicate that the SEC will still proceed cautiously with how it handles cryptocurrency.

Mohit Bajaj, who works at WallachBeth Capital as its director of ETFs, commented:

“It sounds like they just want to take a deeper dive into the product before giving a firm decision, which is probably the best course. They want to ensure the end customer is not at any unknown risks.”

The SEC has officially acknowledged the application by VanEck for the Bitcoin ETF. What this means is that the agency only has a limited amount of time to reject or approve the proposal — and the others like it.

Typically, the SEC has 45 days to make a decision following recognition of an application. That deadline will expire May 3, but the SEC extended the deadline so it wouldn’t miss it.

VanEck’s director of digital asset strategy, Gabor Gurbacs, said:

“We hope that the commission approves Bitcoin ETFs and recognizes that VanEck submitted the earliest active 19b-4 among all issuers. A Bitcoin ETF isn’t controversial anymore.”

In 2021 alone, Bitcoin’s price has soared 88%. That continues a significant upward trend for the most popular and well-known cryptocurrency, which experienced a 305% increase in 2020.

While some may think that Wednesday’s delayed decision by the SEC would signal bad things to come, that’s not necessarily the case. As David Tawil, who works for ProChain Capital, said:

“They will eventually reach a positive conclusion that will allow for the ETF launch to go forward. It’s just taking a bit longer. To allow the SEC more time to go ahead and get comfortable, I think that’s OK. I don’t think anyone should see it as a major threat.”