The Securities and Exchange Commission (SEC) has delayed its decision on several applications for spot bitcoin exchange-traded funds (ETFs). This is not the first time the SEC has delayed a decision on a bitcoin ETF, and many in the industry are expecting further delays.
There are several reasons why the SEC may be hesitant to approve a spot bitcoin ETF. One reason is that the SEC is concerned about the lack of regulation in the cryptocurrency market. The SEC wants to ensure that there are adequate safeguards in place to protect investors before approving a product that would allow them to invest directly in bitcoin.
Another reason for the delay is that the SEC is likely waiting for the results of the Grayscale lawsuit. Grayscale is a cryptocurrency investment firm that has filed a lawsuit against the SEC for rejecting its application to convert the Grayscale Bitcoin Trust to an ETF. The lawsuit is still pending, and the SEC may want to wait for the outcome of the case before making a decision on other bitcoin ETF applications.
It Will Be Delayed Again and Again
Even if the SEC does approve a spot bitcoin ETF, it is likely that the approval will come with a number of restrictions. For example, the SEC may require that the ETF be physically backed by bitcoin, or that it be limited to institutional investors. These restrictions could make it difficult for retail investors to get exposure to bitcoin through an ETF.
It is also possible that the SEC will continue to delay its decision on bitcoin ETFs indefinitely. The SEC has a history of being cautious when it comes to new financial products, and it is possible that the agency will not be comfortable approving a spot bitcoin ETF until the cryptocurrency market matures further.
Approval Will Be on Last Deadline Day
If the SEC does approve a spot bitcoin ETF, it is likely that the approval will come on the last possible day. This is because the SEC is under pressure from Congress to approve a bitcoin ETF, and the agency may want to avoid the appearance of caving to political pressure.
The SEC has a deadline of October 18, 2023 to make a decision on the bitcoin ETF applications that are currently pending. If the SEC does not approve the ETFs by that date, the applications will automatically be denied.
Only One Month Before Halving 2024
The next bitcoin halving is scheduled to take place in May 2024. A halving is an event that occurs every four years when the reward for mining a bitcoin block is cut in half. Halvings are often followed by bull markets in the bitcoin price.
It is possible that the SEC is delaying its decision on bitcoin ETFs until just before the 2024 halving. This would allow the agency to see how the market reacts to the halving before making a decision.
The Big Bullrun Starts in Mid 2024
Many in the cryptocurrency industry believe that the big bullrun will start in mid-2024. This is based on the historical pattern of bitcoin prices, which have typically seen a major bullrun after each halving.
If the SEC does approve a spot bitcoin ETF in the lead-up to the 2024 halving, it could provide a major boost to the bitcoin price. This would be a huge win for the cryptocurrency industry, and it would help to legitimize bitcoin as a mainstream investment asset.
It’s All Planned, Don’t Get Tricked
Some people believe that the SEC’s delays on bitcoin ETFs are part of a larger plan to suppress the price of bitcoin. They argue that the SEC is controlled by the financial establishment, which is threatened by the rise of cryptocurrencies.
There is no evidence to support this claim, but it is something to keep in mind. If you are investing in bitcoin, it is important to be aware of the risks involved. The cryptocurrency market is volatile, and there is always the possibility of losing money.
Conclusion
The delay in the approval of spot bitcoin ETFs is frustrating for many in the cryptocurrency industry. However, it is important to remember that the SEC is a regulatory agency, and its primary responsibility is to protect investors. The SEC is likely to take its time in making a decision on bitcoin ETFs, and it is possible that the approval will not come until 2024. In the meantime, investors should be patient and do their research before investing in cryptocurrencies.