The U.S. Securities and Exchange Commission (SEC) has yet again delayed making a decision on a series of applications from major financial institutions BlackRock, Fidelity, and others to launch Bitcoin exchange-traded funds (ETFs). The applications were first proposed more than a year ago, and have faced multiple delays since then. This article will examine the implications of the SEC’s latest delay on the Bitcoin ETFs.
1. SEC Postpones Bitcoin ETF Applications from BlackRock, Fidelity, and Others
The US Securities and Exchange Commission (SEC) has delayed decisions on nine Bitcoin exchange-traded fund (ETF) applications. The delayed applications were from three companies, including BlackRock, VanEck, and Fidelity.
The BlackRock company had filed two ETF applications with the SEC, one of which would be using cash-settled futures contracts. The two filings from VanEck sought to list one investment product that would also use cash-settled futures contracts. Lastly, Fidelity filed an application for an ETF that would invest in Bitcoin.
This decision by the SEC delayed the possibility of a Bitcoin ETF being approved in the foreseeable future. The SEC released a statement citing ”the extraordinary level of market interest” as the main reason for the delay. The commission clarified that it will complete its responsibility in a timely manner by determining whether to approve the funds after considering the conclusions from its staff.
2. Examining the Reasoning Behind the Hold-up
Understanding why a project is experiencing a hold-up is essential to determine the best course of action moving forward. Below, we examine the various factors that may be influencing the project’s timeline and progress.
- Scope creep – Does the project’s scope keep expanding as it progresses? This can be a major issue if the timeline isn’t adjusted to accommodate the additional work.
- Competing priorities – Are there other activities and projects that need to be addressed before the one in hold-up gets properly dealt with?
- Budget constraints – A project can’t always move forward unless enough resources are available. Not having enough budget to allocate to the project could certainly be an influencing factor.
It’s also worth noting that the process of bidding and cost comparisons can contribute to project hold-ups. Ongoing discussions between stakeholders can also cause issues if decisions can’t be reached swiftly. In some cases, the project can suffer from a lack of sufficient communication. Finally, technical problems can also be the cause, so it’s important to ensure the tools and processes being used are up to scratch.
3. Industry Reactions to the Delay of a Bitcoin ETF
The news of the SEC’s decision to delay a decision on multiple proposed Bitcoin ETFs was both met with excitement and disappointment by many in the industry. Nevertheless, the reactions from these figures show the current state of the pressure from the cryptocurrency space to bring ETFs to market.
Disappointment:
- The delay disappointed industry leaders such as VanEck Vectors CEO Jan van Eck, who confirmed the delay and acknowledged the lack of response from the SEC on cryptocurrency products.
- John Hyland, the Global Head of Exchange-Traded Funds at Bitwise Asset Management, noted his disappointment with the delay but stayed positive, saying “We remain optimistic that 2019 should be the year in which a bitcoin ETF launches.”
Hope:
- The crypto community remains hopeful for the possibility of a Bitcoin ETF, despite the SEC’s worries and concerns about the risks of price manipulation and other complications.
- CBOE Global Markets, one of the companies behind a proposed Bitcoin ETF, remained optimistic with the delay, noting the SEC’s wording that was “carefully worded, leaving open the possibility that, despite the delay, the ETF could be approved in the future.”
The delay marks a second setback to the VanEck SolidX Bitcoin ETF. SEC’s rejection in July of this year also sent shockwaves throughout the blockchain community. As of now, the SEC has not provided any definitive statements on when or if the ETF will be approved. However, both VanEck and SolidX have expressed hope that the ETF will eventually be approved by the SEC. In the meantime, investors have to wait to see if the ETF will ever become a reality.