Bitcoin ETF: Cathie Wood is at it again

A few days ago, the company founded and run by Cathie Wood, ARK Invest, filed a new application with the SEC to issue an ETF in the US based on spot Bitcoin. 

Cathie Wood of ARK Invest is not giving up on the opening of an ETF on Bitcoin

The ETF is called Bitcoin ARK 21Shares, and the SEC may have until January 2023 before it has to give its ruling. 

In reality, the SEC had already rejected an initial application for the ARK 21Shares Bitcoin ETF in April, so this is the second attempt for ARK Invest. 

Until now, the US agency that oversees financial markets has already approved some ETFs that replicate the price of Bitcoin, but only if they are collateralized with futures contracts, not physical BTC. 

Instead, it has not only never yet approved an ETF on the spot price of Bitcoin, but has so far rejected all requests it has received to authorize the issuance of such an ETF on the US markets. 

The new application from ARK Invest is slightly different from the previous one, and includes a proposal from the Cboe BZX Exchange.

Like the previous one, it also involves the European ETF issuer 21Shares. 

Cboe is the Chicago Board Options Exchange, already known for issuing the first-ever Bitcoin futures on the US regulated markets in December 2017, shortly before that of the CME. 

It is also the largest options exchange in the US. 

Cboe itself had previously submitted its own standalone application to the SEC to issue an ETF on Bitcoin, but was forced to withdraw it because they realized it could not be approved. A second one followed, also without success. 

Unless something changes, it seems unlikely therefore that ARK Invest’s second such application will be approved by the SEC, after the previous one was rejected just under two months ago. 

Bitcoin ETFs around the world

It is worth mentioning, however, that there are already spot Bitcoin ETFs around the world, so US investors who would like to use them would simply have to look outside their home country, for instance on the Toronto exchange. 

Moreover, even on the US markets there are ETFs that replicate the price of Bitcoin, albeit not based on BTC but on futures contracts with underlying Bitcoin. 

Therefore, it seems unlikely that a possible SEC approval of the first spot Bitcoin ETF will really revolutionize the crypto market. At most, the news of approval could have an impact in the short term, although it may not generate much interest. 

ETFs allow even non-professional investors to take positions on the price of Bitcoin, without having to manage the ownership of tokens on crypto exchanges. Such investors often prefer to limit themselves to using the instruments they are already familiar with, so in theory an ETF on spot Bitcoin could convince them to invest. 

However, at this time it seems difficult to imagine that any SEC approval would have a strong, profound and lasting impact on the crypto markets.