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The Securities and Exchange Commission (SEC) is on the clock, facing several pivotal decisions on Bitcoin exchange-traded fund (ETF) proposals after losing a case against Grayscale Investments in a federal appeals court. The court ruled on August 29 that the SEC's denial of Grayscale's Bitcoin ETF conversion was "arbitrary and capricious." However, it remains uncertain how this legal upset will affect other pending Bitcoin ETF applications.
Investment firms like Bitwise, BlackRock, Fidelity, Invesco, VanEck, and Wisdomtree are anxiously waiting for the SEC's decisions on their respective Bitcoin ETFs. Bitwise is set to hear from the SEC by September 1, while the others expect to receive a decision a day later, based on recent filings.
In addition, Valkyrie is scheduled to get a response from the SEC on September 4. According to James Seyffart, an ETF analyst at Bloomberg, the SEC has several choices. It can either recognize the court's decision and approve Grayscale's Bitcoin ETF application, or it can create new arguments for a denial. However, revoking current listings of Bitcoin futures ETFs seems unlikely, said Eric Balchunas, another Bloomberg ETF analyst, given the SEC’s openness to Ethereum futures ETFs.
Grayscale's recent court win has raised expectations for other companies, Seyffart explained. Yet, he also cautioned that the SEC has the power to delay its decisions. In fact, the regulator can postpone final verdicts until the 240th day after the initial filing for each fund, with mid-March of next year serving as the ultimate deadline for all applicants.
Additionally, the SEC has 90 days following the August 29 decision to either appeal to the Supreme Court or seek a full circuit court review that could overturn the existing ruling.
As of now, the SEC has not indicated its next steps, adding to the air of unpredictability surrounding these pending Bitcoin ETF applications. The options seem limited for the SEC, and the clock is ticking as investment firms and the broader financial community keenly await the outcomes.
