The U.S. Securities and Exchange Commission has postponed its decision on the approval of two crypto ETFs, one that invests directly in Bitcoin and one that invests in Ethereum futures contracts. The SEC has set the new deadline to be Jan. 1, 2024.
Hashdex, a crypto asset manager, filed to convert its current Bitcoin Futures ETF (DEFI), listed on the New York Stock Exchange (NYSE) and sponsored by Teucrium Trading, to a spot Bitcoin ETF.
If approved, Hashdex Bitcoin ETF will be the first U.S. exchange-traded fund that invests directly in Bitcoin.
According to Bloomberg Intelligence, the SEC had until Nov.17 to make a decision on Hashdex Bitcoin ETF. However, the SEC published a document that addresses the deferral of Hashdex’s filing.
The SEC now announces the new decision deadline to be Jan. 1, 2024, and expects to provide more updates then.
In October, Grayscale, the world’s largest digital asset manager, also filed for an Ethereum Futures Trust ETF (ETH). The ETF would track the performance of Ethereum futures contracts traded on the Chicago Mercantile Exchange (CME).
The approval decision of Grayscale’s Ethereum Futures Trust ETF has also been delayed to Jan.1, 2024.
Why the delays?
The SEC has been reluctant to approve crypto ETFs, citing concerns about the lack of regulation, surveillance, and transparency in the crypto markets.
In 2021, SEC Chairman Gary Gensler stated that “the markets for actual Bitcoin itself today are largely unregulated” and “this lack of regulatory oversight and surveillance leads to concerns about the potential for fraud and manipulation.”
The authorities are also concerned about the high volatility of cryptocurrencies.
As the regulatory body proceeds with caution, looking out for surveillance gaps, financial institutions like BlackRock have also been considering including additional safety nets to their ETF filing and operation.
Earlier in June, BlackRock filed for a Bitcoin ETF and planned to have Coinbase Custody as its Bitcoin custodian. Coinbase, on the other hand, is the only publicly traded and spot-crypto-exclusive U.S. exchange. BlackRock has also filed for its Ethereum ETF.
What’s next?
The crypto industry and investors eagerly await the SEC to approve the first crypto ETF in the U.S. The approval could boost the adoption and legitimacy of cryptocurrencies, as well as provide more exposure and liquidity to the crypto market.
However, the SEC has not given any clear indication of when or how it will approve crypto ETFs.
The latest delays suggest that the SEC is still not satisfied with the current state of the crypto market and its regulation.
