For years, Bitcoin ETFs have been trying to get through the gates of the SEC. As the gatekeeper for what goes public, the SEC has a hold on any fund's future. That hold feels especially strong for Bitcoin ETFs that haven't made it to the public market yet.
What does the approval timeline look like for Bitcoin ETFs moving forward, and will investors be able to capitalize on crypto without leaving the stock market?
Timelines for four Bitcoin ETFs have been delayed
In October, the SEC was approaching decision deadlines for four Bitcoin ETFs:
the Global X Bitcoin Trust
the Valkyrie XBTO Bitcoin Futures Fund
the WisdomTree Bitcoin Trust
the Kryptoin Bitcoin ETF
Now, in the first full week of October, the SEC is working on overtime. The SEC delayed the decision deadline for each prospective fund by 45 days. Now, it has from Nov. 21–Dec. 24 to determine whether the organization will accept the four 19b-4 applications.
Why the SEC delayed Bitcoin ETF approval timelines
The SEC didn't specifically lay out why it extended the approval timelines for these Bitcoin ETFs. It simply stated that the increased timeline can occur "if it finds such longer period to be appropriate."
The SEC said that it wants "sufficient time to consider the proposed rule change and any comments." Basically, the SEC needs more time because, well, it needs more time.
When will the SEC approve a Bitcoin ETF?
The approval process for Bitcoin ETFs has been long-winded. Even Cathie Wood hasn't gotten her own crypto-tracking fund on the docket despite Ark Invest's strong presence in the marketplace.
Prior to the delay, experts were estimating that the SEC would approve at least one Bitcoin ETF by the end of October. Now, it looks like that prediction will likely get pushed back. Other experts say that we might not see a Bitcoin ETF until 2023.
According to a press release, the SEC can increase its decision time from 45 days to 90 days when necessary. The process can take even longer if the SEC thinks that it's necessary. In short, the fate of Bitcoin ETFs is entirely out of the fund managers' hands.
The four funds whose timelines have been extended are far from the only candidates. In May, at least nine applications were awaiting approval and none of them received it. Options from popular names like VanEck and ProShares have also been dismissed.
The SEC's crypto commissioner Hester Pierce said in early 2021, "We've dug ourselves into a little bit of a hole." Pierce was talking about the commission's steadfast denial of Bitcoin ETFs.
"What I would urge my fellow regulators and people at the Fed to think is to think not only to have the reaction of looking at where the negatives are but to really look for the positives," Pierce added, which marks a vastly different view of crypto than others like SEC commissioner Gary Gensler.
After all, Gensler once said that cryptocurrency is wrought with "fraud, scams, and abuse." Perhaps that's a key reason why a Bitcoin ETF hasn't made it through the gates yet.