Since mid-June, after asset management giant BlackRock applied for a Bitcoin spot Exchange-Traded Fund (ETF), many financial institutions have also submitted applications, such as Fidelity Investments, Invesco, VanEck, 21Shares, and WisdomTree. However, the U.S. Securities and Exchange Commission (SEC) rejected all Bitcoin spot ETF applications due to unclear and inadequate application filings, indicating that re-submissions are allowed.
While the SEC has rejected all Bitcoin spot ETF applications, it hasn't ruled out the possibility of reapplying, showing there's still room for maneuvering. Furthermore, the SEC has provided reasons for rejection, such as the failure to disclose the names of regulatory sharing agreement partners, which can help institutions or companies provide more precise application documents to meet requirements.
Regarding the ETF process, the longest duration is 240 days during which the SEC must make a final decision to either approve or reject an application. To help readers understand, let's look at the application process for the ARK 21Shares Bitcoin ETF, which is currently experiencing the fastest growth. Here are some key dates:
- April 25, 2023: Cboe BZX Exchange submitted the application to the U.S. SEC for the listing and trading of ARK 21Shares Bitcoin ETF shares (the initial submission and the start of a new approval process).
- May 15, 2023: The amended ARK 21Shares Bitcoin ETF rules were officially published in the Federal Register and opened for public comments. This marks the official start of the ETF approval process. The SEC must make a decision within a maximum of 240 days (180+60) from this date.
- The first review period is 45 days, which means the SEC must issue instructions by June 29, 2023, either approving, rejecting, or extending. The SEC chose to extend it on June 15.
- The second review period is 45 days, and the SEC must issue approval by August 13, 2023. The SEC decided to extend it on August 11.
- The third review period is 90 days, meaning the SEC must issue approval by November 11, 2023. On September 27, the SEC announced another extension of 60 days (to January 10, 2024), pushing the final deadline for a decision on the ETF.
Most of the other major asset management companies' Bitcoin spot ETFs were announced on July 18 or 19, much later than ARK & 21Shares' product, and the SEC also announced delays on September 27 and 29 (the original decision deadline was October 16-17).
The next significant date in the timeline is November 21, 2023, for the Global X Bitcoin Trust, but it is expected to be delayed as well. After all, its application is the most recent and has only entered the second round of review. Others are already in the third round, and it is unlikely they will receive priority approval. A more critical timeframe to consider is around mid-January next year when there will be eight ETFs awaiting a resolution.
It's worth noting that Morgan Stanley analyst Nikolaos Panigirtzoglou stated in a report that the SEC may approve multiple Bitcoin spot ETF applications "in a matter of months." The analyst noted that "optimism about these approvals has increased" since the SEC decided not to appeal the Grayscale court ruling.
The report suggests that the approval timeline for Bitcoin spot ETFs remains unclear but should be completed within a few months, most likely before January 10, 2024, which is the earliest of the various final deadlines faced by the SEC in Bitcoin spot ETF applications.
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