Following protracted delays and a track record of impeding the highly anticipated Bitcoin ETF, the Securities and Exchange Commission (SEC) has now initiated more constructive conversations with eager applicants.
Consequently, promising progress is being made in these discussions. Among these applicants, we find Cathie Wood, the Chief Executive Officer of Ark Invest. She announced on Monday that her company has noted a positive “change in behavior” from the regulatory authority. This underscores the encouraging developments in their interactions.
Bitcoin ETF Progress: SEC Engagement and Competition in the U.S. Market
Delving into the prospect of a Bitcoin ETF, during an interview with CNBC on Monday, Wood pointed out that Ark had recently submitted its response to the SEC’s earlier inquiries.
These inquiries revolved around the potential risks associated with a spot ETF for investors and the specific measures Ark would implement to mitigate these risks.
Ark, in partnership with 21Shares, is part of a group of twelve investment management entities. They are collectively competing to launch a Bitcoin ETF in the United States. Notable participants in this endeavor include firms like BlackRock, Fidelity, Franklin Templeton, among others.
Growing Optimism Surrounding Bitcoin ETF Approval: Insights from Industry Leaders
“The SEC’s choice to pose inquiries signifies a change in behavior,” Wood emphasized. “Thus, it appears that the prospects for the approval of one or multiple Bitcoin ETFs are growing.”
Wood is not the only one who has observed this change. On Tuesday, Fidelity took action by submitting an updated prospectus to the SEC for its Bitcoin ETF application. In doing so, they addressed the same queries that were posed to Ark.
This revised document includes new information. It offers insights into the mechanics of a Bitcoin hard fork and outlines the custody arrangements for Bitcoin.
Additionally, it underscores the firm’s adherence to Generally Accepted Accounting Principles (GAAP) and provides an evaluation of Bitcoin’s energy consumption. It also delves into other relevant particulars.
Industry Experts and Leaders Optimistic About SEC’s Evolving Stance on Bitcoin ETFs
Bloomberg’s ETF analyst, James Seyffart, noted, “This provides further evidence that prospective issuers of spot Bitcoin ETFs are in discussions with the SEC regarding changes and amendments required for the SEC’s consideration.”
The subsequent day, Mike Novogratz, CEO of Galaxy Digital, made a prediction.
He forecasted that either his firm’s ETF application or those of others would secure approval from the SEC by year-end. This prediction highlights the positive trajectory of the discussions with the SEC.
“When we examine the comment period and the nature of their inquiries,” Novogratz remarked during a CNBC interview, “everything appears notably more specific than one might typically expect.”
This observation underscores the increased level of detail in their discussions with the SEC.
SEC’s Grayscale Ruling and the Path Forward for Bitcoin ETFs: Insights and Speculations
In favor of the applicants is the SEC’s recent legal defeat to Grayscale, the largest Bitcoin fund globally. In August, judges rendered a unanimous verdict. They found the SEC’s rejection of Grayscale’s transition into a spot ETF to be “unreasonable and arbitrary.
This decision came as a surprise, particularly considering the SEC’s prior approval of similar futures products supported by cash.
As of Friday, the window for the SEC to appeal this decision has closed. Consequently, the court is poised to instruct the SEC on how to proceed with Grayscale’s application, which may culminate in outright approval.
Some have postulated that, in response to the Grayscale ruling, the SEC might revoke its approval of previous Bitcoin futures ETFs. Nevertheless, experts contacted by CryptoPotato consider this scenario improbable.
Independent of the Grayscale case, Ark’s ETF application is the first to necessitate a definitive determination on approval or rejection by January 10.
“It is plausible that multiple Bitcoin ETFs could be granted approval concurrently,” Wood concluded.