SEC Defers Decisions on Fidelity, BlackRock Bitcoin ETFs

by Vildana Hajric, Katie Greifeld of Bloomberg News, 9/1/23

The US Securities and Exchange Commission delayed making a decision again on whether to approve the first US exchange-traded fund that invests directly in Bitcoin, disappointing advocates just days after a court ruling viewed by many as clearing a path for the long-awaited product.

The primary US securities regulator, whose three-part mandate includes investor protection, deferred on filings from Bitwise, VanEck, Invesco, Valkyrie and WisdomTree, according to documents posted on its website Thursday. A BlackRock spokesperson said the firm was also deferred. SEC Chair Gary Gensler has consistently justified the opposition to the ETFs as necessary to protect investors from an industry that he says is rife with fraud.

The decision comes after Grayscale Investments won a key victory over the SEC. On Tuesday, a federal appeals court overturned the rejection of Grayscale’s application to convert its Bitcoin trust into an ETF. In the decision, the denial was called “arbitrary and capricious” because the commission failed to explain its different treatment of similar products. ETFs that hold Bitcoin futures were approved in 2021.

NEXT DATES TO WATCH:

Middle of October are the next major days to watch. Namely October 16th. (& @GlobalXETFs' Oct 7)

Also, reminder that we fully expected delays on this round of spot #Bitcoin ETF filings. Would have been a shock if they were approved this week. pic.twitter.com/i14fg8FWun— James Seyffart (@JSeyff) August 31, 2023

Bitcoin, which rallied Tuesday after the appeals panel decision, fell 4.7% to around $26,000 as of 5:41 p.m. in New York. Although the cryptocurrency is up more than 50% this year, it’s still trading at less than half its all-time high of almost $69,000 in late 2021.

The latest deferrals are the second in less than a month. On Aug. 11, officials punted on coming to a decision on a product from issuers 21Shares and ARK Investment Management.