Franklin Templeton spot Bitcoin product delayed as Fidelity joins BlackRock and Grayscale in Ethereum ETF race

• The US SEC has delayed Franklin Templeton’s spot BTC ETF, adding to the list of shattered hopes this week.
• Along with it, the eight-day window has closes, setting the next calendar date of interest as January 10.
• Fidelity has also filed for spot Ether ETF, front-running this other narrative as hope for a spot BTC in 2023 dissipates.
• Meanwhile, rumor has it that the financial regulator has been engaging exchanges advising them that ETFs should do cash creates.

Franklin Templeton, an American multinational company, is the latest name on the US Securities and Exchange Commission’s (SEC) list of delays after the November 17 deadline elapsed.

Also Read: SEC allegedly wants spot Bitcoin ETFs to do cash creates, not crypto, after possible meet-up with exchanges

Franklin Templeton spot BTC ETF delayed

Franklin Templeton’s spot ETF has also been delayed, days after the US SEC issued a delay order for the Hashdex application. It comes on the same day, November 17, when the eight-day window for spot BTC ETFs approvals was supposed to elapse, with all hope now defaulting to the hard deadline of January 10, 2024.

Meanwhile, recent disclosures show that US SEC may have engaged with exchanges over the week, advising them that the ETFs should do cash creates as opposed to crypto. According to ETF specialist with Bloomberg Intelligence, Eric Balchunas, the SEC’s Trading and Markets division reportedly discussed 19b-4 filings with exchanges this week.

For the layperson, 19b-4 filings are used by self-regulatory organizations (SROs), including exchanges, to petition the SEC for new rule changes. It happens that the SEC is driving at spot Bitcoin ETFs should do cash creates as opposed to trading in physical crypto.

The financial regulator’s assumption is that, unlike cryptocurrency exchanges,  broker-dealers cannot deal in BTC. This means that if the ETFs do cash creates, the onus would be on cash creates to transact in BTC. Notably, the broker-dealers are the institutional players tabling their spot BTC ETF applications to the SEC.

 Fidelity files spot Ether ETF

On a similar note, Fidelity has also joined the spot Ether ETF race, rallying alongside the likes of BlackRock. The filing makes them the seventh entrant in the race.

Spot ETH ETF filings

Citing an excerpt from the asset management firm’s application:

To this point, approval of a Spot ETH ETP would represent a major win for the protection of US investors in the crypto asset space.

According to the firm, the absence of such products puts investors in high risk as they seek alternative, riskier ways to get exposure. To support its case, the firm’s filing reiterated that the recent victory in the Grayscale case had been pivotal, particularly where the court determined that the SEC had failed to establish a clear reason for rejecting spot crypto ETFs despite the fact that futures-based products had been allowed.