Crypto Influencers Fuel Speculation as SEC Delays Bitcoin ETF Decision

2023-09-13, 10:01

TL; DR

Some crypto influencers believe that the SEC has done injustice to the cryptocurrency sector by postponing a decision on BTC ETFs.

Some analysts have said that they had anticipated SEC’s delay in making a final decision on BTC ETFs.

The SEC will start making its final position on the 7 spot Bitcoin ETFs applications on 17 October.

Introduction

The crypto market is awaiting the United States Securities and Exchange Commission’s decision on various cryptocurrency exchange traded funds. There are several ETF applications different asset management firms have submitted to the United States Securities and Exchange Commission (SEC). The most outstanding applications relate to ETH and BTC exchange traded funds.

Meanwhile, many analysts believe that the approval of these ETFs is likely to lead to bullish momentum, not just for the cited cryptocurrencies but for many of the other crypto assets depending on how their communities react.

In this post, we will discuss the SEC’s progress on uating BTC ETFs. We will also explore any hindrances and possible sources of delays for approving or disapproving the bitcoin ETFs.

Crypto Influencers Speculate on SEC’s Delay of Approving or Disapproving BTC ETFs

Recently, the United States Securities and Exchange Commission announced the postponement of its final position on the seven leading applications of bitcoin exchanged traded funds (ETFs).

In connection with this, the SEC said, “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.”

Wisdom Tree, VanEck, Bitwise, BlackRock, Invesco Galaxy, Grayscale, Valkyrie Digital Assets and Invesco Galaxy are some of the firms that have applied for the bitcoin ETFs. However, the United States Securities and Exchange Commission, through several fillings, requires more time to review the proposed new rules that relate to crypto ETFs.

As part of the procedure, the SEC should take 45 days after its publication in the Federal Register to apply the proposed rules before listing the investment instruments. After the stated period the SEC will make its final decision on listing of spot bitcoin ETFs. By that time, it can approve, disapprove or further delay the final decision on the BTC ETFs.

It is important to note that the proposed rule change was published on 19 July to enable the public to submit their inputs. Nevertheless, the SEC has made another 45-day extension, which has shifted its decision date on BTC ETFs to 17 October.

In the filings the SEC confirmed that by the stated date its mandate will be to approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change.”

All the cited applicants hope to launch their first bitcoin ETFs which will likely increase retail investment in BTC without holding the crypto asset. That will create convenience for investors since there will be no need to set digital wallets required to manage their bitcoin holdings. Further, they will not worry about directly buying and selling of BTC.

According to the United States laws, the SEC has up to 240 days from its first review to make a final decision on each and every application.

Crypto Influencers’ Reaction to the Postponement of the SEC’s Final Decision Making on BTC ETFs

Many crypto influencers have commented on the SEC’s decision to postpone its decision on the outcome of the BTC ETF applications. First, some influencers said that they expected the SEC to delay its final decision on the applications.

For example, Bloomberg’s James Seyffart expected such delays to occur. He said, “Would have been a shock if they were approved this week,” Seyffart stated.”

On the other hand, a crypto influencer known as Bitcoin Therapist believes that the SEC’s decision to postpone its final decision on BTC ETFs will negatively affect it. In fact, he said that such a decision will “back fire massively in the face of the SEC.”

The SEC to Regret the Delay on BTC ETF Decision - Twitter

Bitcoin Therapist’s view could be that the United States may lose out by delaying the approval of the BTC ETFs since we are approaching critical events like bitcoin halving which may influence the further adoption of BTC.

Another Twitter Influencer, Scott Melker, with more than 910,000 followers, criticized the investors who sold bitcoin before the news of the SEC’s postponement of its final decision. He said, “Here’s an uncomfortable question…Who knew in advance that the ETFs would be delayed and was able to sell off Bitcoin? Sell the news is one thing. Sell before the news is fishy.”

Melker’s premise is that some of the investors who sold their bitcoin were misled. That is why another Twitter user, by the username Skidrowcrypto commented, “A lot of people listen to the wrong people about this kinda stuff—all the pundits that told them a decision was imminent just for engagement—as if the very first Bitcoin spot ETF would be decided in a few or several weeks.”

Another expert who criticized the delay was Judge Neomi Rao who said that the delay in making a decision on BTC ETFs was inconsistent with the approval of bitcoin futures ETFs. In fact, RAO questioned why the SEC views this type of investment assets differently from the underlying bitcoin market.

Rao said, “First, the underlying assets – bitcoin and bitcoin futures – are closely correlated. And second, the surveillance sharing agreements with the CME are identical and should have the same likelihood of detecting fraudulent or manipulative conduct in the market for bitcoin and bitcoin futures.”

Rao said this when she passed a judgement against the United States Securities and Exchange Commission in a case against Grayscale. As a fact, Grayscale had taken the SEC to court for rejecting its bitcoin ETF application resulting in the federal court’s ruling that the SEC should review the rejection of Grayscale’s application to convert its Grayscale Bitcoin Trust (GBTC) to a bitcoin ETF.

By doing that the court is not forcing the SEC to approve Grayscale’s application for a BTC ETF. Nevertheless, according to analyst Mark Palmer, Grayscale’s victory against the SEC has increased the likelihood that it “will finally approve one or more spot bitcoin ETF applications.”

SEC’s Enforcement Action in the Recent Times

The SEC announced the postponement of its decision on bitcoin ETFs two days after the federal court’s ruling that the SEC should review the reason for its rejection of Grayscale BTC ETF. That Grayscale victory against the SEC led two Bloomberg analysts to conclude that there is a 75% chance that the BTC ETF will be approved.

Nevertheless, the delay in making a decision on the 7 spot Bitcoin ETFs shows the uncertainty that exists in the cryptocurrency sector due to lack of clear crypto regulation. It also indicates a need for proper crypto promotion to influential office bearers like the regulators.

Conclusion

Several crypto influencers have voiced their concerns over the SEC’s delay to make its final position on the 7 spot Bitcoin ETFs. Instead, the SEC said that it will make the decision on BTC ETFs starting from 17 October. In all, there are several analysts who believe that the SEC is likely to approve at least one BTC ETF.

Author: Mashell C., Gate.io Researcher

*This article represents only the views of the researcher and does not constitute any investment suggestions.

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