ARK Invest and 21Shares Submit Amended Bitcoin ETF Application
ARK Invest and 21Shares have made an amendment to their Bitcoin exchange-traded fund (ETF) application, which analysts believe could bring it closer to approval. The amended application, filed on October 11, provides additional details on asset custody practices and asset valuation methods. Bloomberg Intelligence analyst Eric Balchunas tweeted that this indicates ARK has addressed the Securities and Exchange Commission’s (SEC) comments and is waiting for their response. He sees this as a positive sign of progress.
Changes in ARK’s Bitcoin ETF Application
The SEC recently emailed fund managers who want to launch spot Bitcoin ETFs with comments and questions that needed addressing. One notable change in the amendment is how ARK calculates its fund’s net asset value (NAV), which now aligns with Generally Accepted Accounting Principles (GAAP) – a standard used by the SEC. The filing also clarifies that the ETF’s assets are held in segregated accounts by Coinbase Custody, preventing commingling with other assets.
Positive Outlook for Approval
While there may be further discussions between ARK and the SEC on minor details, the fact that issuers are engaging in a “back and forth” with the SEC is seen as a positive development. Pressure on the SEC to approve spot Bitcoin ETFs has increased following Grayscale Investments’ court victory over the regulator’s decision to approve Bitcoin Futures ETFs but not spot Bitcoin ETFs. Former BlackRock director Steven Schoenfield believes spot Bitcoin ETFs could be approved as early as January and attract up to $200 billion in Bitcoin investment products.
Hot Take: Potential Approval of Spot Bitcoin ETFs by January
With ARK Invest and 21Shares submitting an amended Bitcoin ETF application that addresses the SEC’s comments, there is optimism that a landmark approval for spot Bitcoin ETFs may be on the horizon. The amendment provides additional details on asset custody and valuation methods, bringing ARK’s application in line with SEC standards. While there may still be some back and forth with the SEC, the engagement between issuers and regulators is seen as a positive sign of progress. This development, coupled with the recent court victory for Grayscale Investments, puts pressure on the SEC to approve spot Bitcoin ETFs. Former BlackRock director Steven Schoenfield predicts that approval could come as early as January, potentially attracting significant investment to Bitcoin products.
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