The U.S. Securities and Exchange Commission (SEC) has again deferred its verdict on the proposed spot Bitcoin exchange-traded fund (ETF) by ARK Investment Management, a fund led by the visionary CEO Cathie Wood.
On August 11th, the SEC announced a 21-day comment period for the ARK 21Shares Bitcoin ETF. This comment period allows the public to voice their perspectives on the matter, marking another chapter in the prolonged odyssey to approve or dismiss spot crypto ETFs on American soil. ARK’s filing to list the ETF was made back in May, providing the SEC with an ample window up to January 2024 to finalize its stance.
“A Regulated Market Of Significant Size”
For an ETF to get the green light for listing on the Cboe BZX Exchange—a goal that ARK Investment Management ardently pursues—the applicant must substantiate the presence of an extensive surveillance-sharing agreement with a “regulated market of significant size.” The SEC has formerly spurned ARK’s spot Bitcoin ETF, emphasizing concerns about potential fraud and the ability to safeguard investors.
In a notable statement, the SEC stated, “The regulated market of significant size test does not necessitate the spot bitcoin market to be under regulation for the commission’s endorsement. Historically, an underlying market for a spot commodity or currency being regulated is more an exception than a rule.”Observing the regulatory climate”, Cathie Wood had previously said in an interview on August 7th that a decision deferment was on the horizon. But she remains optimistic, foreseeing the possibility of the SEC giving a simultaneous nod to multiple spot BTC ETFs in a future scenario.
ARK’s spot Bitcoin ETF aspirations are mirrored by several other financial entities in the U.S., all seeking the elusive regulatory approval to list a spot crypto ETF. Noteworthy is the application from BlackRock, the global behemoth in asset management, which submitted its application in July. In a strategic maneuver, several firms have modified their applications to incorporate cryptocurrency exchange Coinbase as a surveillance-sharing associate, banking on whispers that SEC personnel might be more amenable to such arrangements.
What’s Next For Ark’s Spot Bitcoin ETF, Or Any Spot Bitcoin ETF…
As the crypto world holds its breath, it’s worth noting that the SEC has yet to allow any spot crypto ETF for U.S. listings. However, the commission did shift its stance slightly by permitting investment structures tied to BTC futures in October 2021. Meanwhile, Grayscale remains entangled in a legal skirmish with the SEC, contesting the commission’s rebuff of its Bitcoin trust as a spot Bitcoin ETF.
The coming months are crucial, as regulatory decisions like these shape the trajectory of specific firms and signal the broader direction of financial innovation and investor access in the evolving digital era. We believe, ultimately, the market will see a spot Bitcoin ETF.
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