SEC Delays Decision on Ark 21Shares Bitcoin ETF
In a recent meeting of the Financial Stability Oversight Council, SEC Chair Gary Gensler announced that the U.S. Securities and Exchange Commission has postponed a decision on the Ark 21Shares Bitcoin ETF. This delay marks yet another roadblock in the ongoing fight to allow the trading of cryptocurrency assets on traditional U.S. financial exchanges.
The SEC was initially expected to make a decision on the fund by August 13. However, in a filing on Friday, the regulator stated that it is seeking public comment on one of the amendments in the ETF’s application, effectively extending the timeline for approval. With this delay, it is now likely that a decision on the Ark 21Shares Bitcoin ETF will not be made until 2024.
The Ark 21Shares fund has been considered as the frontrunner for a potential bitcoin ETF launch. However, if the SEC decides to approve these funds, it could choose to do so for multiple funds at once. Cathie Wood, CEO of Ark Invest, expressed her expectation that the SEC would make a decision on multiple funds simultaneously, in an interview with Bloomberg News earlier this week.
Other major organizations, including BlackRock and WisdomTree, have also filed applications for bitcoin ETFs. Meanwhile, Grayscale, a crypto investment firm, is still awaiting a court decision after the SEC rejected its proposal to convert the Grayscale Bitcoin Trust into an ETF.
The Cboe BZX exchange submitted a rule change application to the SEC in April, which would allow the listing of the Ark21 spot bitcoin fund. The initial filing has since been amended multiple times, and now includes a surveillance-sharing provision that was introduced in BlackRock’s filing for a bitcoin fund.
In the past, the SEC has rejected numerous applications for spot bitcoin ETFs. Earlier this year, SEC Chair Gary Gensler appeared to be leading a crackdown against the crypto industry. However, recent developments, including a partial legal victory for Ripple, have indicated a potential shift in momentum towards the crypto industry. This victory cast doubt on the SEC’s efforts to classify most crypto assets as securities.
It is worth noting that the SEC has already allowed the launch of several bitcoin futures ETFs. Despite this news, the price of bitcoin saw minimal movement on Friday, remaining above the $29,000 mark.
Analyst comment
Negative news
As an analyst, the SEC’s decision to delay the Ark 21Shares Bitcoin ETF is a setback for the cryptocurrency market. The delay indicates further challenges in allowing cryptocurrency assets to be traded on traditional U.S. financial exchanges. It is likely that a decision on the ETF will not be made until 2024. However, if approved, it could open the door for multiple funds simultaneously. Other organizations, such as BlackRock and WisdomTree, have also filed applications for bitcoin ETFs. The SEC’s past rejections and recent legal developments make the outcome uncertain.