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SEC Delaying Franklin's BTC ETF and BTC Breaking $40k

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2023-12-04
SEC Delaying Franklin's BTC ETF and BTC Breaking $40k

In a surprising move, the U.S. Securities and Exchange Commission (SEC) has chosen to postpone the approval decision for Franklin's Bitcoin ETF by a month, well ahead of the scheduled deadline of January 1. This decision, though raising eyebrows, is not merely a coincidence; rather, it has sparked speculation within the cryptocurrency community.

What Could SEC’s Early Decision Mean?

Franklin Templeton, a powerhouse in traditional finance managing an impressive $1.5 trillion in assets, joined the BTC ETF race quite late in September. Its second deadline was scheduled to be on January 1, 2024.

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The SEC's decision to delay Franklin's Bitcoin ETF approval is strategic and potentially indicative of a broader plan. By choosing to delay a month in advance, instead of a few days before the deadline or on the day of the deadline as usual, the SEC may be signaling its intention to approve all Spot Bitcoin ETFs simultaneously in January 2024.

“They might have chosen to do this early so they could have the comment period end before Jan 10, in order to approve everyone at the same time,” remarked Van Buren Capital general partner, Scott Johnsson in a recent X (formerly Twitter) post.

James Seyffart, ETF Research Analyst at Bloomberg Intelligence, added weight to this speculation in a tweet, stating, "Window is officially Jan 5th to Jan 10th. Really this means that any potential approval orders are going to come on either Monday Jan 8, Tuesday Jan 9, or Wednesday Jan 10."

January 10 is a crucial date in the SEC's calendar, as it's the day by which the regulator is set to rule on a Spot Bitcoin ETF proposed by Ark Invest and 21Shares. Crypto enthusiasts and industry analysts are interpreting this move as an effort to level the playing field. Approving all ETFs together eliminates any potential first-mover advantage, ensuring fairness in the approval process. This decision suggests a shift in the SEC's approach, signifying its reportedly growing acceptance of crypto.

While the move towards synchronized approvals is generally viewed positively, Eric Balchunas, Senior ETF Analyst for Bloomberg, raises concerns about fairness. Balchunas expressed his opinion on X, noting that while he generally supports simultaneous launches, Franklin entered the scene much later than others. He points out that Franklin filed its proposal about five months after ARK, and yet they may potentially launch on the same day. Balchunas acknowledges the difficulty for the SEC to draw the lines in this scenario, implying the complexity of balancing fairness and regulatory considerations.

Skeptics say that the SEC's intentional delay of Franklin's application by a month suggests a potential coordinated denial of all related proposals, aligning with its historical approach over the last decade. However, recent developments in the progression of Spot Bitcoin ETF applications present a contrasting narrative. Notable events include Grayscale's legal victory against the SEC, the SEC’s decision not to appeal the said court case against Grayscale, the listing of BlackRock's Bitcoin ETF on DTCC, the narrowing of the GBTC discount, and increased congressional pressure on the SEC. In light of these factors, a comprehensive refusal of all proposals may now appear less likely.

Implications for the Crypto Community

The implications of this strategic delay are far-reaching. It not only affects Franklin's Bitcoin ETF but has broader implications for the entire cryptocurrency ETF landscape. Investors and stakeholders are closely monitoring these developments, anticipating a potential wave of approvals that could impact market dynamics.

The SEC's move aligns with the ongoing efforts to establish clear regulatory frameworks for digital assets. As the crypto market continues to mature, synchronized approvals could provide a more stable and predictable environment for more risk-averse investors and market participants.

Bitcoin Surpasses $40,000 in Anticipation of ETF

Following the SEC’s delay decision, Bitcoin has broken the $40,000 mark, reaching its all-year-high. This surge is attributed to a combination of factors, including general enthusiasm about anticipated U.S. interest rate cuts and heightened expectations for the approval of US-stock market traded Bitcoin funds.

Bitcoin's value soared to $40,210 in recent trading, marking its highest point since April 2022. The anticipation of a Bitcoin ETF approval, particularly after reports that the SEC won't appeal a court ruling against rejecting a Grayscale Investments ETF application, has added fuel to the cryptocurrency's momentum.

It is likely that the approval of a spot Bitcoin ETF could pave the way for a flood of new capital into the sector. This milestone reinforces the market's optimism and hints at a potential new wave of interest from investors eagerly awaiting regulated avenues to enter the crypto space.

Looking Ahead

The SEC's decision to delay Franklin's Bitcoin ETF approval, while initially surprising, may be part of a broader effort to instill confidence in the regulatory process. As the cryptocurrency market evolves, such strategic moves by regulatory bodies play a crucial role in shaping the market's trajectory.

In the coming weeks, all eyes will be on the SEC as the cryptocurrency community awaits official announcements and a potential shift in how ETF approvals are approached. The outcome could have lasting effects on investor sentiment, market dynamics, and the broader acceptance of digital assets within traditional financial systems. Investors and stakeholders alike remain vigilant, navigating a landscape that is increasingly gaining mainstream attention.

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Disclaimer: The opinions expressed in this article are for informational purposes only. This article does not constitute an endorsement of any of the products and services discussed or investment, financial, or trading advice. Qualified professionals should be consulted prior to making financial decisions.