SEC Delayed Decision on ARK Invest’s Bitcoin ETF Request

Everyone was filing for Bitcoin ETF a while ago, but now the SEC has delayed approving ARK Invest’s BTC ETF. On August 11, 2023, the United States Securities and Exchange Commission (SEC) opened a 21 days comment period for ARK 21Shares Bitcoin ETF.

SEC Delayed its Decision on ARK 21 Bitcoin ETF

Cathie Wood’s ARK Invest initially filed its application for exchange-traded funds (ETF) in May 2023. As per the rules, SEC has a maximum of 240 days until January 2024 to reach a final decision. But on August 21, 2023, the agency swung into action after its publication in the Federal Register.

Experts believe the financial watchdog would decide whether to approve or disapprove the spot BTC ETF request. In April 2022, ARK Invest applied for Bitcoin ETF with the SEC. The proposal was rejected at the time because they had issues with the intermediary exchange in the deal.

The Chicago Board Options Exchange or Cboe, BZX Exchange requested the Feds to list ARK 21Shares Bitcoin ETF. Back then, the SEC thought that the proposed rule change by the exchange to enlist the ETF was not “designed to prevent fraudulent and manipulative acts and practices”. Also, it might be unable to protect the public interest and investors.

Cathie Wood’s ARK Invest must provide specific evidence to the SEC to list the ETF on Cboe BZX Exchange this time. They must prove that the “comprehensive surveillance-sharing agreement” exists between the associated parties. BlackRock, while filing its spot BTC ETF application, involved Coinbase to facilitate the requirement of surveillance sharing.

Moreover, the SEC cleared its stance regarding the approval of ETFs and the recent delay by saying, “ The regulated market of significant size test does not require that the spot bitcoin market be regulated in order for the Commission to approve this proposal, and the precedent makes clear that an underlying market for a spot commodity or currency being a regulated market would actually be an exception to the norm.”

On August 7, 2023, the founder and CEO of ARK Investment Management, Cathie Wood, talked about her speculations that the SEC might delay the decision. She also hinted that whenever the SEC was ready to approve, the agency would approve multiple requests simultaneously at some time.

Beneficiaries of the Bitcoin ETF Arena

JPMorgan’s Nikolaos Panigirtzglou suggested a contrasting stance towards the whole scenario of the Spot Bitcoin ETF. Everyone in the market thinks that approval from the SEC would drastically change the whole cryptocurrency scenario, but he feels differently. As per JPMorgan analysts, the worlds leading cryptocurrency Bitcoin is likely to emerge as the biggest beneficiary from the whole situation.

Countries like Canada and Europe already have products like the spot Bitcoin ETF. After the approval from the Securities and Exchange Commission, the United States will have a similar scenario. It would bring more liquidity to the Bitcoin market. However, the emergence of spot Bitcoin ETF might affect the trading activity on BTC.

This approval would allow Traditional Finance (TradFi) players to venture into the crypto industry. Hence, it considerably boosted the adoption scenario of cryptocurrency.