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

July 16, 2022 2:36 pm

There have been many asset managers and investment firms within the United States that are currently pushing for the approval of the first spot Bitcoin ETF.

However, none have been successful so far as all proposals have been rejected by the SEC which has only approved future based ETFs, but not spot ETFs.

Many investors believe that a spot ETF on the market is needed for more institutional capital to enter the crypto markets which would in turn help make crypto much more mainstream.

The latest development within this space shows that the SEC has once again delayed their decision on the proposal for a spot Bitcoin ETF and this time it is by Cathie Wood’s ARK 21Shares firm.

DeCrypto.co reports:

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.

Cathie Wood, the founder of ARK Invest, commented on this delay and mentioned that it did not make sense that the SEC would approve future based ETFs but not spot ETFs.

Other firms have also called out this inconsistency that has been displayed by the SEC’s recent actions with Grayscale being one of them.

In fact, Grayscale has reportedly taken legal action against the SEC and will be suing the agency after the SEC’s recent rejection of Grayscale’s spot Bitcoin ETF application.

Whether or not Grayscale will succeed this time in court is unknown, but it seems that the industry as a whole will not stop until one finally gets approved.

DeCrypto.co concludes:

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.

To conclude, an approval may be inevitable, but the wait is uncertain given the SEC’s history of delays on key decisions.

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