The U.S. Securities and Exchange Commission (SEC), sought comments on a rule change that will allow it to decide the fate of spot Bitcoin (BTCUSD) exchange-traded funds (ETFs), effectively delaying the call on approving Ark Invest's Ark21Shares Bitcoin ETF.

The SEC's Decision to Delay

The SEC has invited public comments on the Ark21 Shares Bitcoin ETF proposal, a joint project from ARK Invest and 21 Shares. Specifically, the SEC would like interested parties to share their views on whether a spot bitcoin ETF may be susceptible to manipulation and whether the levels of liquidity and transparency in the bitcoin market are sufficient to avoid potential manipulation.

The SEC's original deadline for a decision on the spot bitcoin ETF application was August 13. Now, a final decision may get kicked into 2024. The SEC has previously rejected several spot Bitcoin ETF applications; however, several bitcoin ETFs based on futures contracts already exist.

Earlier this month, ARK Invest CEO Cathie Wood predicted that her firm and 21 Shares's proposal would be delayed by the SEC in an interview with Bloomberg. Additionally, Wood predicted several spot bitcoin ETFs would eventually be approved simultaneously.

All Eyes on Blackrock's Bitcoin ETF Application

A slew of spot bitcoin ETF proposals were made in June after Blackrock (BLK) entered the fray for the first time with their proposal. Many market commentators saw BlackRock's entry into the spot bitcoin ETF market as a sign that approval from the SEC could be around the corner due to their pivotal role in the U.S. financial system.

Earlier this week, Galaxy Digital CEO Mike Novogratz claimed his contacts at BlackRock indicated they expected approval on their spot bitcoin ETF proposal within six months.

While the SEC has taken a more critical approach to the crypto industry this year, bitcoin has mostly remained immune to the crackdown, as it is the only crypto asset that current chair Gary Gensler has clearly stated is not a security.