Bitcoin ETF: SEC Delays Decision on Dual-Faced 7RCC Filing

The U.S. Securities and Exchange Commission (SEC) says it will require additional time to consider the proposed 7RCC Spot Bitcoin and Carbon Credit Futures ETF. This proposed ETF is a novel fund that seeks to combine Bitcoin and carbon credit futures contracts.

SEC’s Reason for Delaying the Decision

As per a Thursday filing, the SEC stated that it would decide to “approve or disapprove, or institute proceedings” for the proposed ETF by June 24, 2024. Some analysts wonder if this will go the way Michael Saylor predicted for Ethereum recently at his corporation event.

“The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change,” the SEC’s filing explained.

The 7RCC Spot Bitcoin and Carbon Credit Futures ETF is a novel approach to portfolio diversification. The model aims to combine the volatile nature of Bitcoin with exposure to carbon credit futures. 

The proposal submitted shows the ETF will invest 80% of its assets in Bitcoin and 20% in “financial instruments, including swap agreements, which provide exposure to Carbon Credit Futures represented by the Index.”

Unique Investment Approach and Portfolio Diversification

This hybrid approach could offer investors an opportunity to diversify their portfolios with a mix of digital assets and environmentally-focused financial instruments. 

However, it also raises questions about regulatory compliance and market stability, which the SEC will need to address before approving the ETF. Notably, Ethereum ETF is also on the waiting list of the SEC with hopes dimming for its approval.

The S-1 registration statement for the ETF was filed on December 18, 2023, just weeks before the SEC approved 11 spot Bitcoin ETFs. However, the SEC has continued to footdrag on its decision with a possible ruling now scheduled for June.

Gemini, the cryptocurrency exchange named as the custodian for the proposed ETF, in a post explained that the fund will provide investors with an opportunity to diversify and balance their Bitcoin portfolios with the progressive realm of Carbon Credit Futures.