November Resembles October for U.S. Crypto ETFs Amid SEC Decision Delays
In October 2023, significant expectations surrounded the approval of crypto exchange-traded funds (ETFs) in the U.S. Several deadlines set by the Securities and Exchange Commission (SEC) were anticipated for various spot crypto ETF applications. However, a U.S. government shutdown caused a standstill in the approval process, leaving many hopeful investors disappointed. With the start of November, the landscape for crypto ETFs appears to shift once more.
November Could Unveil U.S. Crypto ETFs
With the SEC’s previous inactivity, multiple issuers are now exploring alternative procedures that may circumvent the need for formal SEC approval. This approach led to the launch of four crypto ETFs from notable firms. These included:
- Canary Capital
- Bitwise
- Grayscale
These ETFs commenced trading this week due to procedural filings that contained specific wording to avoid delays. Under U.S. securities regulations, these updated S-1 registration statements automatically become effective after a 20-day period unless the SEC intervenes.
New Filings and Potential Launches
The recent success of these crypto ETFs has prompted a surge in new filings. Notably, Fidelity submitted an updated S-1 for its spot Solana ETF, while Canary Capital filed for its XRP ETF. If the SEC maintains its current approach without hindering these processes, the market may see its first XRP fund by November 13, 2023.
Despite this optimistic outlook, there are limitations to this workaround. While the SEC has addressed filings related to Solana, HBAR, and Litecoin ETFs, there remains minimal communication regarding the XRP application. This uncertainty could lead the SEC to potentially block automatic approvals.
Expert Insights on the Outlook
James Seyffart, an ETF analyst at Bloomberg Intelligence, highlighted the potential for several funds to launch in November. However, he noted that some filings have yet to receive feedback from the SEC. “Many funds might debut next month, but certain applications may struggle without the government resuming operations,” he stated.
The evolving landscape reflects a pivotal moment in the long-standing efforts to introduce crypto ETFs to U.S. markets. Rather than relying solely on formal SEC approvals, issuers are leveraging procedural avenues to push forward. The momentum for these launches in November hinges significantly on the resolution of the governmental deadlock.
