SEC Delays Decision on Cathie Wood’s ARK 21Shares Bitcoin ETF

The SEC has delayed a decision on whether to allow a spot market Bitcoin ETF by Cathie Wood’s Arc Invest and crypto investment firm 21Shares to start trading. 

In a Tuesday notice, the SEC said the ARK 21Shares ETF would get an answer on August 30. “The Commission finds that it is appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein,” the notice said. 

The SEC already rejected an application for an ARK 21Shares ETF back in April, just as it has every single request for a spot market Bitcoin ETF that has come before it, but ARK Invest applied again. 

An ETF, short for exchange-traded fund, is an investment tool that tracks the value of its underlying asset. A Bitcoin ETF would therefore enable both retail and institutional investors to gain exposure to BTC without having to buy and store the cryptocurrency themselves. The SEC has been reluctant to approve a Bitcoin ETF in the U.S. because it claims that the crypto market can be easily manipulated. 

But it has approved futures Bitcoin ETF products, which trade shares that represent contracts betting on the future price of Bitcoin. Futures, options, and other derivatives trade on exchanges such as CME, which are regulated by the Commodity Futures Trading Commission.

ARK Invest’s founder, Cathie Wood, said in April that “it just doesn’t make sense” that the SEC would say no to spot Bitcoin ETF products, but yes to those that track futures. 

Cryptocurrency asset management firm Grayscale last month announced it was suing the SEC for rejecting its application to convert the Grayscale Bitcoin Trust (GBTC) to an ETF. The firm said it was “deeply disappointed” with the SEC’s decision to “continue to deny spot Bitcoin ETFs from coming to the U.S. market.” 

A long list of investment firms have applied to the SEC for a spot ETF product but have faced rejection. Bitcoin ETFs exist in other countries, though, including Canada and Brazil. 

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