SEC Extends Grayscale ETF Decision by Second 45-Day Period

The commission has set a newly revised date for the upcoming year, intensifying expectations for its ultimate decision.

Digital sand timer waiting on ETH ETF.
Created by Kornelija Poderskytė from DailyCoin
  • The Securities and Exchange Commission is yet to decide its stance on spot ETFs.
  • The commission has extended Grayscale’s spot Ethereum ETF decision deadline.
  • The crypto community is still abuzz with anticipation.

The ongoing crypto market rally has heightened expectations for the Securities and Exchange Commission’s nod on spot Exchange Traded Funds (ETFs), keeping issuers and investors on edge with mounting anticipation. Yet, the SEC appears to be maintaining a slow pace, consistently extending its decision deadlines.

Following its push back on Grayscale’s application on November 16, the SEC has now extended its timeline further.

SEC Delays Grayscale’s Ethereum ETF Decision

On December 5, the Securities and Exchange Commission allocated an additional 45-day timeframe to the deadline of its decision on Grayscale’s ETF application. 

The extension was determined to allow the commission ample time to evaluate the firm’s proposed initiative to convert its Grayscale Ethereum Trust (GETH) into a spot Ethereum ETF, and address associated concerns.

“The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein.”

The revised deadline is set for January 25, 2024, marking the date when the Commission will disclose its decision to either approve or disapprove, or initiate proceedings to determine the fate of the firm’s application.

The SEC’s extension heightens the already mounting anticipation for its approval, amplifying the tension among investors and issuers as the commission deliberates on spot ETFs.

The Hype Surrounding Exchange Traded-Funds(ETFs)

The cryptocurrency industry has seen a wave of excitement throughout the year, fueled by the prospect of a spot ETF approval. 

In June 2022, digital asset manager GrayScale Investments filed a request with the US SEC to launch a bitcoin Spot ETF. The motion was initially rejected by the commission, prompting Grayscale to challenge its decision through a court filing.

Following the court challenge, a decision was ruled in Grayscale’s favor, compelling the SEC to reopen its application. Capitalizing on the momentum, other major asset management players, including BlackRock, Fidelity, and Bitwise joined the race with their individual applications, seeking to convert their respective trusts and shares into ETFs.

While the SEC has not granted approval to any of the filed applications, the crypto industry remains optimistic about the potential benefits of an eventual approval.

On the Flipside

  • On December 4, asset management firms BlackRock and Bitwise filed amendments to their respective Bitcoin ETFs applications.
  • Experts like JP Morgan have questioned spot ETFs hype, casting a shadow of doubt on the much anticipated approval.
  • So far, thirteen financial institutions have filed for spot ETFs with the SEC but none has been approved.

Why This Matters 

The SEC’s move to extend its deliberation process adds to the growing anticipation for its approval of spot ETFs, which would mark a significant milestone for the industry and accelerate the mainstream adoption of crypto assets.

Inflows to crypto funds continue to surge as investors maintain anticipation of ETF approval. Read more: 
Crypto Funds Hit 10-Week Inflow Streak on Continued ETF Hope  

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This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
Grace Abidemi

Grace Abidemi, a cryptocurrency reporter at DailyCoin, covers industry developments and trends. She previously worked as a freelance writer. With a Bachelor's degree in German Language and certifications in marketing and storytelling, Grace creates engaging content. When not working, she's in Nigeria, mastering cooking and canvas painting, and enjoys learning about different cultures and languages.