BlackRock among four of seven with Bitcoin spot ETF decisions delayed ahead of possible government shutdown

• BlackRock, BitWise, Invesco, and Galaxy Bitcoin Spot ETF applications have received a delay order from the US SEC.
• This checks out four out of seven in the list, with the heft of BlackRock hinting at more delays to come.
• Bloomberg’s ETF specialist James Seyffart anticipates more delay orders within the next 48 hours ahead of a possible government shutdown.

The race for Bitcoin Spot Exchange-Traded Funds (ETF) continues, but the US Securities and Exchange Commission (SEC) is not showing any haste. Latest reports show a series of delays coming in ahead of a possible US government shutdown.

Also Read: Valkyrie Investment wins race to offer first ETH futures ETF

BlackRock among delayed BTC spot ETF applications

The BlackRock asset management company is among four of seven delayed decisions as market onlookers keep their eyes peeled on the US SEC to provide decisions for the many Bitcoin Spot ETF filings and re-filings already on its desk. Others include BitWise Investment, Invesco, and Galaxy, which had also applied to become issuers in the US.

ETF specialist with Bloomberg Intelligence James Seyffart says, “This means we are expecting all Bitcoin ETF's squared in Magenta to get their delay orders today or tomorrow.” Seyffart attributes these early delay decisions to the fear of government shutdown.

The series of delays invigorates speculation that a Spot Bitcoin ETF approval may not come until Q1 2024 at the earliest. This stance is bolstered by BlackRock, boasting over 98% in approval and its remarkable heft in the industry, not securing approval this far. Meanwhile, we are just about two weeks (15 days) until the SEC’s deadline to decide whether they are going to appeal their loss in the Grayscale Bitcoin Trust (GBTC) case. Otherwise, they would have to either provide an alternative reason for denial or approve the conversion of the GBTC to an ETF.

Ripple lawyer John Deaton has already lost hope for any BTC Spot ETF approval this year.

Meanwhile, there is speculation that the financial watchdog may have taken an unusual step by reaching out to issuers of BTC spot ETFs.

If there is any truth to this statement,  then it could be a positive sign. Meanwhile, after four of seven, three decisions remain pending, WisdomTree, VanEck, and Fidelity. 

US government shutdown, what this is about

The US government has hinted at a possible shutdown that could potentially see millions of federal staff and military employees either sent home or working absent pay. This may be imminent unless Congress achieves a final agreement. Failure to secure a deal will see the lion’s share of the federal government’s funding expire by midnight of Saturday.

It therefore poses a threat with the capacity to disrupt everything, starting with air travel, and payment benefits, and if push comes to shove, the precarious US economy may suffer an additional blow. Some call it a “low-grade civil war” in the US.

The situation, an impasse rather, comes on the back of some hardline Republicans pushing back against short-term funding agreements. Congress on the other hand is bent on cutting down on spending. With this, some federal personnel are preparing for a lapse. Citing an excerpt from a note to the Department of Health and Human Services:

…reduced staffing across nearly every division for the duration of the lapse… pre-notified employees would be temporarily furloughed.

Besides the possibility of a funding lapse, the Federal Aviation Administration (FAA) is also facing the Saturday deadline for reauthorization. Nevertheless, it is not clear whether legislators will approve an FAA reauthorization law separately from the spending package.