The U.S. Securities and Exchange Commission (SEC) has decided to postpone its decision on several spot Bitcoin proposals, including exchange-traded funds (ETFs) submitted by BlackRock, Invesco, Bitwise, and Valkyrie. These delays, which were disclosed in separate filings on September 28, come just two weeks before a scheduled second deadline for many applicants who were anticipating responses from the securities regulator between October 16 and 19.
The decision to delay these proposals is closely linked to the looming possibility of a U.S. government "shutdown" on October 1, which could disrupt the operations of various financial regulators and federal agencies. As of now, the House and Senate have yet to reach an agreement on financing bills required to fund government operations, and they must pass 12 distinct full-year funding bills before October 1 to prevent a government shutdown.
This isn't the first time the SEC has postponed spot Bitcoin ETF applications. In late August, as the initial deadline approached, a group of applications faced delays.
Furthermore, there's a chance that a third set of deadlines for these seven companies, expected around mid-January, could also be pushed back. The SEC is obligated to make a final decision no later than mid-March.
In late August, Bloomberg ETF analyst Eric Balchunas raised the probability of a spot Bitcoin ETF receiving approval by the end of 2023 to 75%, up from the previous estimate of 65%. This increase in likelihood was attributed to the U.S. Circuit Court of Appeals' clear and decisive ruling in favor of Grayscale against the SEC. Balchunas has even raised this probability to 95% by the end of 2024.
