The U.S. Securities and Exchange Commission (SEC) has extended its review period for the Global X Bitcoin Trust’s application to launch a spot bitcoin ETF. Announced on November 17, 2023, this delay perpetuates the uncertainty surrounding spot bitcoin ETFs in the market.

Background on Global X Spot Bitcoin ETF Proposal

Global X’s proposal, submitted on August 4, 2023, aims to offer investors exposure to bitcoin through an ETF structure. This approach is expected to widen bitcoin’s appeal among investors. The SEC’s delay stems from the need to further evaluate if the proposed ETF complies with the Securities Exchange Act’s criteria, focusing on fraud prevention and investor protection.

SEC’s Concerns and Public Input

The SEC’s hesitation revolves around issues like market liquidity, transparency, and susceptibility to manipulation in the BTC market. The commission invites public commentary, particularly on the bitcoin market’s resilience against price manipulation. The examination also includes the Trust’s operational structure, focusing on its in-kind transactions mechanism for share redemption and sale.

Implications of SEC’s Delay

While the delay does not signal outright disapproval, it indicates the SEC’s methodical approach in reviewing crypto-related proposals. The SEC has set a 35-day timeframe for public comments on the Global X filing.

Additional Delays in Crypto ETF Decisions

In a broader context, the SEC has postponed decisions on other crypto ETF applications, including those by Franklin Templeton and Hashdex. This indicates the SEC’s intent to utilize its full review timeframe, extending the uncertainty in the crypto ETF market.

Industry Response to SEC’s Stance

Despite the crypto industry’s eagerness for spot bitcoin ETF approvals, the SEC’s approach remains cautious and opaque. These repeated delays have dampened hopes for any immediate approval breakthroughs.