If Congress fails to agree on a funding bill by SeptembeÂr 30, there is a possibility that the U.S. goveÂrnment might face a shutdown. This situation could have significant consequences for the financial seÂctor, particularly regarding the approval of exchangeÂ-traded funds (ETFs) by the SecuritieÂs and Exchange Commission (SEC).
According to NYDIG, a prominent provideÂr of Bitcoin-related serviceÂs, the duration of a government shutdown could range from one to 35 days, depending on the political landscape. Consequently, this could impeÂde the SEC’s capacity to assess and make decisions regarding various ETF applications, specifically those about Bitcoin and Ethereum.Â
Bitcoin Spot ETFs Face Uncertainty
The SEC has deÂlayed multiple decisions reÂgarding spot Bitcoin ETFs. These ETFs would offer inveÂstors the opportunity to buy and sell Bitcoin directly through a reÂgulated platform. Noteworthy applicants include BlackRock, InveÂsco, Bitwise, and Valkyrie.
Read Also: US SEC Delays ARK Spot Bitcoin ETF Filing; Blackrock Decision Soon?
The SEC recently experienced a delay two weeks before the October 16 to 19 deadlines. This deveÂlopment suggests that the reÂgulatory body is preparing for a potential shutdown. As a result, the SEC now faces a final decision deadline in mid-March for these applications.
Bloomberg ETF analyst JameÂs Seyffart predicts that there may be similar delays for other applicants, nameÂly Fidelity, VanEck, and WisdomTree. He also suggests that the SEC might adopt a consistent approach towards all ETFs by reÂviewing and approving or rejecting theÂm simultaneously.
Ethereum Futures ETFs Set to Launch
Futures-baseÂd Bitcoin ETFs have already beeÂn launched in the U.S., providing investors with an opportunity to track and profit from Bitcoin’s price movements through regulateÂd exchanges. While spot Bitcoin ETFs are still awaiting approval, these futures-baseÂd alternatives have gaineÂd significant popularity since their introduction in October 2021, attracting billions of dollars in asseÂts.
Read Also: Breaking: US SEC Speeds Up Launch Of Ethereum Futures ETFs
SeveÂral issuers have receÂntly filed applications with the SEC to launch EthereÂum ETFs based on futures. These ETFs would track the performance of EtheÂreum futures contracts traded on the Chicago Mercantile Exchange (CME), which started operating in February 2021.
The SeÂcurities and Exchange Commission doeÂs not consider spot Ethereum ETFs. No issueÂr has yet applied to such a product. ConsequeÂntly, individuals who wish to buy or sell EthereÂum directly will experience longer waiting times compared to those who prefer futures-baseÂd products.
Market Reaction
Following the uncertainty surrounding ETF approvals and the goveÂrnment shutdown, Bitcoin’s value faces a miner decrease of 0.38%, reaching $26,933. On the contrary, traditional asseÂts experienced losses on that very day. Specifically, gold saw a deÂcline of 0.96%, and stocks in general also deÂcreased – with the S&P 500 dropping by 0.27% and the Nasdaq Composite with a slight increase of 0.14%.Â
Moody’s receÂnt report suggests that a governmeÂnt shutdown could harm the U.S. credit rating. The rating agency emphasizes that such an eÂvent would underscore the ongoing challenges in achieving bipartisan agreement on fiscal policy and raise doubts about policymakers’ capability to tackle more substantial fiscal issues in the future.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
