The Likelihood of Spot Bitcoin ETFs Getting Approved in 2023 Has Diminished: Hopes Dashed

• The US Securities and Exchange Commission’s (SEC) early postponement of the ARK 21Shares Spot Bitcoin ETF application has raised concerns.
• Before making this decision, the SEC had until November 11 (approximately 46 days later), but it made this decision quite early. The SEC typically makes such decisions only a few days (and not weeks) in advance.
• Despite all the postponement news, the crypto community has grown concerned about what this move might mean for the potential launch of any Spot Bitcoin ETFs this year.

The SEC’s recent decision to delay ETF applications has caused the community to lose hope; Bitcoin ETFs may not be approved this year.

SEC’s Action Destroys Hopes for ETF Approval

The U.S. Securities and Exchange Commission (SEC)’s early delay of the ARK 21Shares Spot Bitcoin ETF application has raised concerns in the crypto community about what this move could mean for the potential launch of any Spot Bitcoin ETF this year.

Bloomberg Analyst James Seyffart questioned the SEC’s recent decision in a tweet on the X (formerly known as Twitter) platform, expressing doubts about whether this decision “could put an end to hopes for ETF approval this year” or whether we might see a similar delay in other Spot Bitcoin ETF applications set to conclude in October.

On September 26th, the SEC extended the decision deadline for Cathie Wood’s ARK Invest ETF application to January 10, 2024 (the final date). However, before making this decision, the SEC had until November 11 (approximately 46 days later), but it made this decision quite early. The SEC typically makes such decisions only a few days (and not weeks) in advance.

Seyffart expressed less optimism, stating in a subsequent tweet, “Now everyone can pack up and go home,” suggesting that hopes for launching a Spot Bitcoin ETF this year have diminished.

These statements come after Bloomberg analyst Eric Balchunas, along with Seyffart, had raised the likelihood of a Spot Bitcoin ETF launching this year to 75% following Grayscale’s victory against the SEC in August.

Despite all the postponement news, the SEC has yet to make a statement regarding Grayscale’s application because the court has compelled the Commission to reexamine the application. Many are awaiting the Commission’s decision to appeal, with the appeal deadline ending in October.

Possible Reasons for the SEC’s Early Postponement

Many in the crypto community, including Seyffart, have put forth two main theories to explain the SEC’s early postponement of the ARK 21Shares Spot Bitcoin ETF application. The first theory attributes it to the potential impact of a government shutdown.

The US government services are expected to shut down on October 1st, affecting the SEC. The Commission will furlough 90% of its workforce and suspend most of its operations. However, this still seems distant from November 11, and government activities are expected to have resumed by then.

The second major theory is that Congress’s letter to SEC Chairman Gary Gensler may have touched the wrong nerves and could be a possible reason why the Commission made this decision.

In the letter, Representatives called on the SEC to approve pending Spot Bitcoin ETFs following the court ruling in the Grayscale case and said the “SEC’s current stance is unsustainable for progress.