Ark Invest CEO Cathie Wood believes that the Securities and Exchange Commission’s (SEC) approval of spot Bitcoin ETFs could be the “final seal of approval” for institutions considering entering the crypto space. Ark Invest, in collaboration with 21Shares, has a live filing with the SEC for such a product, with a decision deadline set for January 10.
In October 2021, the SEC permitted bitcoin futures ETFs to begin trading. Wood found these approvals “interesting” due to the counterparty risk associated with these funds, in contrast to a spot product backed by bitcoin held in cold storage. Coinbase has been named as the custodian of the funds’ BTC by most issuers seeking to launch bitcoin ETFs.
Grayscale Investments won a court case against the SEC in August, with judges ruling that the commission’s denial of the conversion of the Grayscale Bitcoin ETF (GBTC) to an ETF, while allowing futures-based funds, was “arbitrary and capricious.”
Wood is optimistic about the future of bitcoin, stating, “I think it’s all coming together, and if you look at our appreciation expectations for bitcoin, the biggest part of the appreciation during the next five to 10 years we think will come from institutional.” She has previously suggested that the price of one bitcoin could reach $1 million or more in the long term.
Bloomberg Intelligence analysts estimate a 90% chance of spot bitcoin ETF approval by January 10. This would mark a significant shift for the SEC, which has rejected numerous spot bitcoin ETF proposals over the past decade.
21Shares President Ophelia Snyder echoed Wood’s sentiments, noting recent “pattern breaks” as issuers strive to get these funds approved. She stated, “I think the fact we’re seeing very material differences in this round of the spot process versus prior rounds is a very promising indication of a different outcome.”
These changes include issuers regularly updating their Bitcoin ETF filings, which industry observers believe could indicate ongoing discussions with the SEC. BlackRock and Bitwise, for instance, updated their S-1 forms on Monday.
One notable addition in BlackRock’s amendment was the inclusion of language about the firm raising $100,000 of seed capital for the fund. Bloomberg Intelligence analyst James Seyffart commented, “[It’s] meaningful because it shows they are doing everything needed to launch. But I don’t think it means much more than that.”
Other amendments have been more technical, addressing issues such as the electricity usage of bitcoin mining or the potential impact of a digital asset being classified as a security in the future.
Ark and 21Shares’ latest bitcoin ETF filing came in April, a few months before BlackRock entered the scene, prompting Fidelity, Invesco, and others to renew their own bitcoin ETF efforts. Wood concluded, “We do think while we’re first in line that a number of the firms will be approved at the same time. Depending on exactly how they filed, it could be that more than a half dozen are approved in the first go.”
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