As the US Securities and Exchange Commission opened its first case to approve a spot Bitcoin ETF, analysts at the ASTL investment project note that even if the SEC approves a spot Bitcoin ETF, it will be a month before the actual launch. The expected launch delay following potential SEC approval will be due to the ETF’s two-step launch process. In order for an issuer to launch a Bitcoin ETF, it must obtain SEC approval from the Division of Trading and Markets for a 19b-4 filing and from the Division of Corporate Finance for an S-1 filing or prospectus.
The corporate finance department’s primary focus is on the details of fund operations and risk disclosure. To date, of the 12 Bitcoin ETF applications, nine issuers have submitted revised prospectuses confirming that they have communicated with corporate finance. Market analysts believe the launch of the Bitcoin ETF could be delayed if the SEC approves 19b-4 before prospectuses are signed. Bloomberg ETF analyst James Seyffart noted that even if 19b-4 is approved, S-1 approval could take weeks or months between approval and launch. “There are TWO paths that need to be taken to launch an ETF. Even if 19b-4 is approved, the S-1 will still need Corp Fin division approval. No indication that this has yet been done. It is possible and even likely that between approval and Launch could be weeks or even months away,” tweeted/X James Seyffart (@JSeyff).
Basically, the SEC has eight days, starting November 8th and ending November 17th, to approve the first spot Bitcoin ETF. Although market experts have increased the chances of approval to 90%, they believe that this will not happen until early next year. “New note from me today. We still believe the spot Bitcoin ETF has a 90% chance of approval by January 10th. But if it happens sooner, we will enter a period where there *MAY* be a wave of approvals for all current candidates.” – tweeted/X James Seyffarth.
The SEC previously extended the deadline for comments and application amendments on the spot Bitcoin ETF to November 8th. The race for spot Bitcoin ETFs in the US began as the world’s largest asset manager BlackRock filed an application. While Fidelity and several other asset managers have also applied for spot Bitcoin ETFs, most have faced rejection or withdrawn their applications. However, the 2023-24 cycle has prompted many market commentators to predict possible approval of a spot ETF, with a probability of up to 90%.
