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The U.S. Securities and Exchange Commission has postponed several decisions on spot bitcoin Exchange-Traded Fund applications in a move catching financial markets off guard. Among the high-profile candidates impacted are BlackRock
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Contrary to market expectations, the SEC’s latest delays occurred two weeks earlier than the scheduled October 16 to 19 deadlines. The regulator’s decision appears to be influenced by the impending U.S. government shutdown, which could disrupt financial regulation and other federal operations.
The possibility of a government shutdown hinges on congress’s ability to agree on various funding bills required to sustain operations. Currently, both the House and the Senate remain in a deadlock, further intensifying the financial sector’s uncertainty.
This isn’t the first time the SEC has postponed decisions on a spot bitcoin ETFs. A similar situation occurred in late August, creating a ripple effect of delays that has left applicants and investors on edge. The regulator now faces a mid-March deadline for final decisions on these applications.
Bloomberg ETF analyst James Seyffart expects similar delays for other applicants such as Fidelity, VanEck, and WisdomTree. According to Seyffart, the upcoming government shutdown likely spurred the SEC to act preemptively.
Among the applicants, BlackRock’s submission holds significant weight, given the asset management giant’s impressive track record with the SEC. Analysts suggest that approval for BlackRock could signal a broader acceptance of bitcoin within traditional finance.
While delays are not uncommon, the SEC’s recent hold-ups have only deepened the industry’s questions about what comes next. This confusion of the delay is heightened by an open letter from U.S. Representatives Tom Emmer, Mike Flood, Ritchie Torres, and Wiley Nickel, who have called on SEC Chair Gary Gensler for swift approval of spot Bitcoin
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The SEC’s early decision to delay bitcoin ETF approvals highlights the larger issues surrounding governmental shutdowns and financial regulation. As deadlines loom and uncertainty prevails, all eyes remain on the SEC for their final verdict.
