For the very first time in more than a year, there are no active bitcoin exchange-traded fund (ETF) propositions pending before the U.S. Securities and Exchange Commission (SEC).
Money manager VanEck, financial services firm SolidX and Cboe BZX Exchange withdrew a highly-anticipated proposition Tuesday, pointing out an ongoing U.S. government shutdown as the reason. The proposal, first submitted last June, faced a last due date of February 27 for approval or rejection. Due to the shutdown, many legal experts anticipated that the SEC would
decline the proposal outright rather than let it be authorized by default. VanEck CEO Jan van Eck stated the business will”re-file and re-engage in the discussions” with the SEC the regulator remains in a state of limbo. Bitwise Asset Management, which revealed its intent to declare a fund with NYSE Arca previously this month, has not yet sent the required guideline modification proposition. Bitwise did not react to an ask for remark by press time. Advocates of the fund hope a controlled bitcoin ETF, once authorized,
will bring in new financiers, increasing bitcoin’s liquidity and potentially even pumping its cost. Any day now? There are likewise 9 different rule change proposals for ETFs that are in
a state of limbo
. The proposals, submitted by ProShares, Direxion and GraniteShares, were declined last year by the SEC staff, who pointed out concerns about bitcoin market adjustment. A review of that decision by the commission was called for the next day. Nevertheless, while the SEC should adhere to rigorous due dates when initially examining a rule modification proposition, there are no such due dates for a review, lawyer Jake Chervinsky informed CoinDesk. These evaluations have actually taken anywhere from six to 16 months in the past, but are likewise suspended while the SEC is closed.
For this reason, a decision on any of these nine proposals could happen as quickly as the federal government re-opens, or it might drag on for months and even, theoretically, years.
Twinkle of hope
It is possible that an ETF might still be authorized by the end of the year, Chervinsky told CoinDesk through email, though he included that it “will depend on (1) when the ETF proposal is filed and (2) the state of the bitcoin markets when the SEC makes its choice.”
Once a proposal is filed, the SEC has 240 days to authorize or reject it, needs to the regulator take every extension allowed under the law. As such, any proposal filed by May 5, 2019 at the most recent would need a final choice prior to December 31, Chervinsky explained.
He added that he would be “shocked” if at least one proposal was not released within that time.
“The concern will then be whether the bitcoin markets grow enough before the SEC makes its choice to sufficiently resolve all the issues that have killed ETF proposals in the past, such as assessment, liquidity, custody, and market adjustment,” Chervinsky stated, concluding:
“In my view, it’s completely possible that another  months of advancement in the cryptocurrency ecosystem might be enough to lastly call for approval of a bitcoin ETF.”
Jan Van Eck at Agreement: Invest 2018, picture from CoinDesk archive