Cryptocurrency advocates will have to wait a while longer for the U.S. regulator's verdict on bitcoin exchange-traded fund approval as applications pile up.
The U.S. Securities and Exchange Commission said in a filing Wednesday that the agency is pushing its decision on whether to "approve or disapprove, or institute proceedings to determine whether to disapprove" the structure to June 17. The delay comes a day before the SEC was due to rule on an application from VanEck Associates, one of at least 11 issuers weighing a Bitcoin ETF, according to Bloomberg Intelligence.
Optimism has been building that after nearly a decade of efforts, the SEC may finally approve a bitcoin ETF launch this year. Underpinning that conviction is new SEC leadership in Chairman Gary Gensler, who's seen as more open-minded toward cryptocurrencies than his predecessor Jay Clayton. However, Wednesday's filing suggests that the agency is proceeding cautiously.
"It sounds like they just want to take a deeper dive into the product before giving a firm decision, which is probably the best course," said Mohit Bajaj, director of ETFs for WallachBeth Capital. "They want to ensure the end customer is not at any unknown risks."
VanEck's application is one of three filings acknowledged by the SEC, meaning it has a limited amount of time to either approve or reject the proposals.
"We hope that the commission approves bitcoin ETFs and recognizes that VanEck submitted the earliest active 19b-4 among all issuers," said Gabor Gurbacs, director of digital asset strategy at VanEck. "A bitcoin ETF isn't controversial anymore."
Bitcoin has skyrocketed 88% so far in 2021, building on last year's 305% surge. Though hopes are riding high for bitcoin ETF approval this year, Wednesday's delay isn't discouraging for the cryptocurrency community, said ProChain Capital's David Tawil.
"They will eventually reach a positive conclusion that will allow for the ETF launch to go forward. It's just taking a bit longer," said Tawil, the firm's president. "To allow the SEC more time go ahead and get comfortable, I think that's OK. I don't think anyone should see it as a major threat."
