SEC defers decision on Invesco, WisdomTree bitcoin ETFs

SEC defers decision on Invesco, WisdomTree bitcoin ETFs
The latest delay came as a disappointment after Grayscale won a court ruling this week overturning the SEC's rejection of its application to convert its bitcoin trust into an ETF.
AUG 31, 2023
By  Bloomberg

The Securities and Exchange Commission delayed making a decision again on whether to approve the first U.S. exchange-traded fund that invests directly in bitcoin, disappointing advocates just days after a court ruling that was viewed by many as clearing a path for the long-awaited product. 

The securities regulator, whose three-part mandate includes investor protection, deferred on filings from Invesco, Valkyrie and WisdomTree, according to documents posted on its website Thursday. SEC Chair Gary Gensler has consistently justified the opposition to the ETFs as necessary to protect investors from an industry that he says is rife with fraud.

The decision comes after Grayscale Investments won a key victory over the SEC. On Tuesday, a federal appeals court overturned the agency's rejection of Grayscale’s application to convert its bitcoin trust into an ETF. In the decision, the denial was called “arbitrary and capricious” because the commission failed to explain its different treatment of similar products. ETFs that hold bitcoin futures were approved in 2021.

The SEC has to address an application by Bitwise by the end of Friday. The regulator will also need to soon weigh in on filings from BlackRock, VanEck and Fidelity. 

https://twitter.com/JSeyff/status/1697328531519279217

Bitcoin, which rallied Tuesday after the appeals panel decision, fell 4.2% to around $26,100 as of 4:03 p.m. in New York. Although the cryptocurrency is up more than 50% this year, it’s still trading at less than half its all-time high of almost $69,000 in late 2021.

The latest deferrals are the second in less than a month. On Aug. 11, officials punted on coming to a decision on a product from issuers 21Shares and ARK Investment Management.

Crypto proponents have argued for years that a so-called spot fund would be beneficial to investors and would, additionally, help bring the industry closer into the world of traditional finance. Having such a product would make it easier for money managers to access cryptocurrencies on their clients’ behalf, the argument went. It would also suggest maturity for the relatively nascent industry, which has been battling naysayers since its inception, and which has been skirmishing with regulators for years.

It’s difficult to overestimate how much excitement the mere idea of a spot-bitcoin product has brought about among some advocates, especially considering that some project these funds could end up raking in tens of billions of dollars. 

Filings this year from Wall Street heavyweights such as BlackRock, Invesco and Fidelity had some analysts suggesting the SEC could be more open toward a bitcoin fund after years of failures to launch by various issuers. BlackRock, for one, has a near-pristine record in launching ETFs, and many saw its entrance into the race as a harbinger of an eventual debut.

Baron Discovery fund manager shines spotlight on Repligen, CyberArk

Latest News

SEC Says Game Service Roblox Part of ‘Active Investigation’
SEC Says Game Service Roblox Part of ‘Active Investigation’

Short sellers previously said the company was under investigation, though Roblox denied allegations.

Musk’s DOGE descends on CFPB with intention to shut it down
Musk’s DOGE descends on CFPB with intention to shut it down

The Consumer Financial Protection Bureau is in the crosshairs of the Republican group that is widely attempting to dismantle government agencies.

Advisor fighting Finra banishment loses $17.7 million dispute with old firm
Advisor fighting Finra banishment loses $17.7 million dispute with old firm

National Securities Corp. sued the advisor in 2020, alleging breach of contract and unjust enrichment.

Job numbers, inflation leaving room for Fed to hold rates
Job numbers, inflation leaving room for Fed to hold rates

Recent data support a measured pace by the Federal Reserve for the year ahead.

Private assets remain hot despite surging stock market
Private assets remain hot despite surging stock market

Financial advisors are still adding alternatives despite the surge in publicly traded stock prices

SPONSORED Taylor Matthews on what's behind Farther's rapid growth

From 'no clients' to reshaping wealth management, Farther blends tech and trust to deliver family-office experience at scale.

SPONSORED Why wealth advisors should care about the future of federal tax policy

Blue Vault features expert strategies to harness for maximum client advantage.