As the U.S. Securities and Exchange Commission (SEC) opens the window for potential approval of a spot Bitcoin ETF, analysts highlight the likelihood of delays even if approval is granted. The launch of exchange-traded funds (ETFs) is expected to be delayed as it involves a two-step process, requiring approval from the SEC's Division of Trading and Markets for the 19b-4 filing and approval from the Corporate Finance Division for the S-1 filing or prospectus. The 19b-4 filing focuses on the operational details and risk disclosures of the fund.
With 12 Bitcoin ETF applications in consideration, nine issuers have submitted revised prospectuses indicating communication with corporate finance departments. Analysts suggest that if the SEC approves the 19b-4 filing before the prospectus is signed, the launch could face delays. Even if 19b-4 is approved, the S-1 approval, which deals with operational details and risks, might take additional weeks or months, according to Bloomberg ETF analyst James Seyffart. The SEC has an eight-day window, starting from November 8 to November 17, to potentially approve the first spot Bitcoin ETF.
While market experts place the likelihood of approval at 90%, they anticipate that the approval might not materialize until early next year. The race for a U.S. spot Bitcoin ETF commenced with BlackRock's application, the world's largest asset manager. Other firms, including Fidelity, have also sought approval for spot Bitcoin ETFs. Although several applications were rejected or withdrawn, the current market cycle, spanning 2023-2024, has led many commentators to predict a higher probability of spot ETF approvals, potentially reaching up to 90%.
