The SEC delays Ark's spot ETF proposal for the second time

The Securities and Exchange Commission (SEC) of the United States announced today that it will delay its decision on the Ark Invest and 21Shares proposed Ethereum spot ETF. The decision, which was scheduled for September 20, has been delayed to January 20, 2024.
This is the second delay for Ark's proposal, which was initially filed in June 2023. The first delay, announced on July 14, was for 60 days.
Today's delay was met with disappointment from Ark and 21Shares, who said the SEC is unduly delaying the approval of exchange-traded funds (ETFs) for cryptocurrencies.
"We are disappointed that the SEC has decided to delay its decision on our proposed Ethereum spot ETF," said Cathie Wood, CEO of Ark Invest. "We believe our proposal meets all SEC requirements and we are confident it will be approved."
The SEC said the delay is necessary to allow for further review of the proposal. The regulator also said it is receiving an increasing number of applications for cryptocurrency spot ETFs and is prioritizing those it believes have the best chance of being approved.
Currently, the SEC has approved only one cryptocurrency spot ETF, the ProShares Bitcoin Strategy ETF, which was launched in November 2021. Ten other funds are currently under review.
The delay in the approval of cryptocurrency spot ETFs in the United States has been a brake on the growth of the cryptocurrency market in the country. Spot ETFs are seen as a way to make cryptocurrencies more accessible to institutional investors and the general public.
Possible reasons for the delay
The delay of Ark's proposal could be due to a number of factors, including:

• The SEC's concerns about cryptocurrency volatility.
• The lack of liquidity in cryptocurrency markets.
• The lack of cryptocurrency regulation.

The SEC said it is carefully considering these factors before making a decision on Ark's proposal.
Implications of the delay
The delay of Ark's proposal could have a negative impact on the cryptocurrency market in the United States. The delay in the approval of spot ETFs could dampen the influx of new investors into the market and could lead to increased price volatility.
However, the delay could also be seen as a sign that the SEC is taking cryptocurrency regulation seriously. The regulator may be intent on approving only spot ETFs that meet its rigorous standards.
Ultimately, the impact of the delay of Ark's proposal on the cryptocurrency market will depend on the SEC's final decision. If the SEC approves the fund, it could lead to a significant increase in investor interest in cryptocurrencies. However, if the SEC rejects the fund, it could lead to a period of uncertainty and volatility.