Bitcoin remains above the $36,000 mark despite a recent announcement from the US Securities and Exchange Commission (SEC) to delay the approval process for several spot Bitcoin ETF applications.
On November 17, the SEC filed extensions for its decision-making on spot Bitcoin ETF applications from GlobalX and Franklin Templeton.
SEC Delays Bitcoin ETF Approval
The SEC seeks public comments concerning a rule change enabling the listing of GlobalX’s ETF on the Cboe BZX Exchange. In August, the financial watchdog had said it would approve, reject, or institute proceedings on whether to approve or disapprove the rule change by November. 21.
With its current decision, the SEC has instituted proceedings allowing it to approve or reject the application by February 2024. Meanwhile, the federal agency extended the deadline for its decision on Franklin Templeton’s application to January 1, 2024. Both applications entered the scene following BlackRock’s application for a spot Bitcoin ETF in June.
Simultaneously, rumors abound regarding the SEC’s potential recommendation of a “cash create” fund-handling system for ETF applicants. This system would enable the exchange of cash for ETF shares and is seen as an alternative to trading actual Bitcoin, preventing reliance on third-party brokers.
Bloomberg analyst Eric Balchunas suggested that while 2-3 filers may opt for cash-creates, others might prefer the “in-kind” system. Balchunas emphasized that despite the benefits of the “cash create” system, it poses challenges for investors regarding spreads and taxation. He said this might result in many applicants favoring the “in-kind” approach.
“This doesn’t change our 90% odds up or down [for a Bitcoin ETF approval], but it is a good sign the process is marching and SEC has a path forward in the plumbing that they are comfortable with,” Balchunas asserted.
However, JPMorgan has observed that similar ETFs in Canada and Europe have garnered minimal investor interest since their launch. Despite Ripple and Grayscale’s recent legal setbacks against the SEC, the firm suggests the regulatory tightening in the crypto market might not ease considerably due to its historically unregulated nature.
Analysts at JPMorgan expressed skepticism about a change in US lawmakers’ approach to crypto regulations, particularly in the aftermath of the FTX scandal.
“US crypto industry regulations are still pending and we do not believe US lawmakers would shift their stance because of the above two legal cases especially with the memories from the FTX fraud still fresh,” the JPMorgan analysts wrote.
BTC Price Continues to Hold Steady
Despite these regulatory developments, BTC’s price has displayed resilience, maintaining a price level above $36,000. The flagship digital asset was trading for $36,628 as of press time, according to data from BeInCrypto.
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