SEC decision on Bitcoin ETFs won’t leave out Wall Street giants
The Securities and Exchange Commission’s (SEC) delay in deciding whether to approve a spot Bitcoin (BTC) exchange-traded fund (ETF) in the United States is fueling expectations that a final verdict will come in a batch that includes key players on Wall Street, including BlackRock and Fidelity.
“There’s a tremendous amount of pressure on the SEC to approve a number of these ETFs, particularly because the approved Futures backed products are lagging spot performance substantially, harming investors,” markets veteran and co-founder of CoinRoutes Dave Weisberger told Cointelegraph, adding that all pending applications will likely be included in a final decision.
The SEC is analyzing a total of eight applications for a spot Bitcoin ETF, following past delays and denials of the crypto product in recent years. Companies up for a decision are Ark and 21Shares, Bitwise, BlackRock, VanEck, WisdomTree, Invesco and Galaxy Digital, Fidelity, and Valkyrie. Together, the firms manage over $15 trillion in global assets.
On Aug. 11, the U.S. markets regulator opened a 21-day comment period for the ARK 21Shares Bitcoin ETF. As per the filing, the SEC is seeking answers on whether ARK 21Shares’ proposal is designed to prevent fraudulent and manipulative acts and practices, as well as whether the Bitcoin market is susceptible to manipulation.
Furthermore, the regulator raised concerns about Coinbase’s surveillance-sharing agreement, asking commenters to examine whether Coinbase’s participation in the ETFs surveillance would, in fact, help to detect, investigate, and deter fraud and manipulation in Bitcoin’s price.
“The SEC’s main concern about spot crypto ETFs is about the potential market manipulation by a big whale. Theoretically, it can happen if the SEC approves the ETFs of one or two investment funds. But if it decides to register all 8 ETFs, it will sharply mitigate the probability of manipulation, because these firms will be able to trade with each other frequently, taking opposite sides,” explained Ruslan Lienkha, chief of markets at YouHodler.
The delay had a lower impact on Bitcoin’s price, hovering around the $30,000-mark at the time of writing. According to Mauricio Di Bartolomeo, co-founder of crypto lending platform Ledn, traders and investors are “expecting them [the SEC] to take all the time they could,” with today’s decision having a low impact “in terms of market expectations.”
The SEC still has two deadlines before a final decision is made. The third deadline for ARK 21Shares application is due by January 202. Valkyrie has the latest application in line, with two upcoming deadlines in January and March next year.
The BTC ETF outcome could reshape the crypto investment landscape. According to Lienkha, an approval could potentially bring over $70 billion in liquidity to the Bitcoin market. “The opportunity to invest in Bitcoin through ETFs will give regular investors more confidence, as with professional help, they don’t have to dive into all the technical details and analyze potential risks by themselves,” he noted.
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Senate Banking Committee Chair Tim Scott says he’s looking to mark up a crypto market structure bill next month to have it on President Donald Trump’s desk by early next year.
Scott told Fox Business on Tuesday that the committee has been negotiating with Democrats to reach a deal, but accused the party’s senators of stalling.
“Next month, we believe we can mark up in both committees and get this to the floor of the Senate early next year so that President Trump will sign the legislation making America the crypto capital of the world,” Scott said.
The House passed the CLARITY Act in July, which outlines the Commodity Futures Trading Commission and the Securities and Exchange Commission’s power to regulate crypto, and the Senate has been working on its own version of the bill.
Republicans on the Senate Banking Committee released a discussion draft on their section of the bill in July and suggested it would marry up with the CLARITY Act, and the Senate Agriculture Committee released its discussion draft on Nov. 10, which left much of the bill up for change.
The Agriculture Committee has jurisdiction over the CFTC, while the Banking Committee oversees the SEC and is leading parts of the bill relating to securities laws.
Bill will create clear rules and unlock crypto: Armstrong
Coinbase CEO Brian Armstrong said in a video posted to X on Tuesday that he was in Washington, DC, “pushing for market structure legislation,” and noted there had been “a lot of progress.”
“Senate banking is also working nights and weekends to get the next iteration of their text out, so we’ve got a good chance, I think, of a markup for this bill in December, hopefully get it to the president’s desk shortly thereafter,” Armstrong said.
“This would be a big milestone to get crypto unlocked with clear rules in the US, which would benefit all companies,” he added.
Where the bill will go from here
The CLARITY Act was one of three major crypto bills the House passed in July after a 10-hour voting session alongside the GENIUS Act, which aims to regulate stablecoins and the Anti-CBDC Surveillance Act, which outlaws central bank digital currencies.
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As the Senate is working on its own version, the CLARITY Act will return to the House for final approval if it’s passed by the Senate. It would then be sent to Trump to be signed into law.
Republicans hold the majority in the Senate with 53 seats, compared to the Democrats’ 47 seats, with legislation effectively requiring 60 votes to pass.
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