Bitcoin, the leading cryptocurrency, fell after the SEC informed the delay.

The U.S. Securities and Exchange Commission (SEC) has postponed its decision on spot bitcoin exchange-traded fund (ETF) applications, including those from BlackRock (NYSE: BLK), Fidelity, and others, until October. This delay, outlined in agency filings, has caused a 4.65% drop in the price of bitcoin over the past 24 hours, bringing it down to $25,961.12.

The SEC had been reviewing applications from both cryptocurrency-focused and traditional finance companies, with the aim of launching the first spot bitcoin ETF. Advocates argue that such ETFs would facilitate retail investment in bitcoin without the need for wallet setup or direct bitcoin purchase. (CoinDesk)

In the latest development, the SEC has extended comment periods and allowed for more public input on these applications. The new deadlines for Wise Origin, Galaxy, WisdomTree, and Valkyrie are in mid-October, while Bitwise’s deadline is October 16. The regulator has a total of 240 days to make a final decision from the start of its review, and historically, it has used this entire period to evaluate such applications.

Notably, a recent ruling by the D.C. Circuit Court of Appeals questioned the SEC’s basis for rejecting bitcoin ETF applications, stating that its arguments appeared “arbitrary and capricious.” This decision followed an argument from Grayscale, a subsidiary of Digital Currency Group, that its proposed ETF was similar to bitcoin futures ETFs, which the SEC had approved. The court found that there was a strong correlation between spot and futures market prices for bitcoin and ordered the regulator to review Grayscale’s application once again.

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