Third time’s the charm? ARK and 21Shares file again with SEC for Bitcoin ETF
Cathie Wood’s ARK Invest and European crypto investment firm 21Shares are apparently unfazed by the cryptocurrency regulatory environment in the US, and are again seeking approval for a Bitcoin (BTC)-based financial product.
On April 25, the two companies requested that the US Securities and Exchange Commission (SEC) approve the creation of a spot Bitcoin exchange-traded fund (ETF) despite being rejected twice before.
The two companies first applied to create their spot Bitcoin ETF on June 28, 2021, which was later rejected by the SEC in April 2022. The regulator said the product did not meet the requirements to list a financial product under its practice rules as well as those of the Exchange Act.
The couple submitted a new request for a second time in May 2022, an application that the SEC rejected again on January 26 this year.
An ETF allows investors exposure to a particular asset without actually owning the underlying financial product. A spot Bitcoin ETF allows investors to gain indirect exposure to the cryptocurrency with shares that track BTC’s price in real time without actually holding Bitcoin.
While the SEC has approved a number of Bitcoin Futures ETFs – which expose buyers to the potential future value of BTC – it has so far rejected every application for a spot Bitcoin ETF citing difficulties in “protecting investors and the public interest” against fraud and manipulation .
Related: Despite regulatory clarity, Hong Kong crypto ETFs are experiencing tepid demand
According to ETF analysts from Bloomberg, it seems likely that a spot Bitcoin ETF could become a reality in the US by the middle of this year.
New note on why we think spot bitcoin ETFs will be approved in early summer 2023. SEC proposes to expand definition of “exchange” which will bring crypto platforms under SEC reg. After that (which may take a year) look for ETFs to get green light light via @JSeyff pic.twitter.com/TtFgFXrJ8h
— Eric Balchunas (@EricBalchunas) March 24, 2022
Crypto conglomerate Digital Currency Group (DCG) is currently seeking to convert its flagship Grayscale Bitcoin Investment Trust (GBTC) into a spot Bitcoin ETF and has sued the SEC to reject the proposal.
Chief Counsel in Grayscale, Craig Salm so in a tweet on January 12: “The case is moving fast. While the timing is uncertain, oral arguments could be as soon as Q2 [2023].”
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