In an unsurprising development on January 30, 2024, the US Securities and Exchange Commission (SEC) announced that Cboe BZX Exchange, the prominent equity exchange firm, is withdrawing its application for a spot Bitcoin ETF through Global X, officially ending the long push for the regulatory nod. The announcement comes amid the SEC’s approval of 11 spot Bitcoin ETFs in January. This development came after a US court forced the agency to take a second look at Grayscale’s spot Bitcoin ETF application in December.
Additionally, the recent decision of Cboe BZX Exchange marks the second unsuccessful attempt at applying for a spot Bitcoin ETF listing on US stock exchanges, with the first being in 2021. On January 26, 2023, the SEC (issued) an order that disapproved Cboe BZX Exchange’s proposal to list and trade spot Bitcoin ETF shares after months of consideration. Coincidentally, the decision to withdraw its recent application came (exactly) one year after the disapproval.
It remains unclear if the equity exchange firm will retry the application (once more). But it will likely want to focus on its existing spot Ethereum ETF applications currently filed with the SEC.
The Cboe Spot Bitcoin ETF Application Timeline
On August 4, 2023, Cboe BZX Exchange officially submitted a proposed rule change to list and trade shares of Global X spot Bitcoin ETFs on US stock exchanges. In typical SEC fashion, the commission extended the deadline for its decision on the application, initially extending the deadline to November 21, 2023.
The SEC (publicly) informed on November 17, 2023, of its move, pushing back the date for its decision by another 45 days. The commission can delay its decision on any spot ETF application by 240 days before it would have to give a verdict, positive or negative.
On January 16, 2024, the SEC approved 11 spot Bitcoin ETFs for listing on US stock exchanges but didn’t include Cboe’s BZX Exchange Global X application among the approved products. Many saw the action as a vote of no confidence by the regulator. On January 26, 2024, Cboe BZX Exchange quietly communicated a proposal to withdraw the proposed spot Bitcoin ETF application after it became increasingly clear that it had reached a dead-end and had no chance of being approved.
Finally, the SEC officially announced receipt of the exchange’s decision to withdraw its application on January 30, 2024, marking the second significant roadblock for a potential Cboe BZX Exchange spot Bitcoin ETF. The earlier application in 2021 suffered a rejection.
Experts-The Application Withdrawal is Unsurprising
Most analysts expected the withdrawal after the SEC’s decision to approve 11 spot Bitcoin ETFs in January while keeping mute on the Cboe BZX Exchange application. The application came on August 4, 2023, so the SEC had enough time to decide whether to approve or reject the proposal. While reacting to the Cboe decision to withdraw its spot Bitcoin ETF, James Seyffart, a Bloomberg ETF analyst, said the exchange had been out of the race since December.
“Official withdrawal request for @GlobalXETFs’ #Bitcoin ETF. This is not surprising because we have known they were out of the race since at least early December but now it’s official,” the Bloomberg analyst posted on X (formerly known as Twitter) after the SEC announced the withdrawal on Tuesday.
Spot Ether ETF Applications are Now in Focus
On September 6, 2023, Cboe BZX Exchange filed the first set of spot Ethereum ETF applications in the United States. The exchange asked the US Securities and Exchange Commission to approve its proposals for Ethereum exchange-traded products linked to Ark 21Shares and VanEck (in separate filings). While the exchange is the first issuer to submit a spot Ethereum ETF application with the US SEC, analysts are not very optimistic about the company getting the required regulatory nod, given its history with the financial regulator.
With most of the current crypto price action going into a gray zone, expectations remain high as the chances of a hot crypto summer continue to rise with Ether ETF applications in view. Most observers believe spot Ether ETF applications from Grayscale and BlackRock have a higher chance of getting approved by May, but again, we will have to wait and see.