The U.S. Securities and Exchange Commission (SEC) has extended its decision on the approval of a spot Bitcoin Exchange Traded Fund (ETF) from Ark Investment Management, led by a well-known investor Kathie Wood.
Confirmation of the postponement was revealed in a document released by the regulator last Friday, August 11, 2023.
The SEC has opened a public consultation, inviting the community to provide their views on the Ark 21Shares Bitcoin ETF application. While many expected a resolution by August 13, the decision may now be delayed for several weeks or even months.
As evidenced by your documentation Officially, the SEC started a “proceeding” to make a final decision on the future of this Bitcoin ETF. The change follows several proposals received by the SEC in recent months.
Significantly, this filing does not necessarily reveal the SEC’s position on the matter. It only reinforces its commitment to scrutiny, as the document emphasizes that there is no final decision.
To anyone asking if it’s common practice for the SEC to be delayed in asking for comment. The answer is yes https://t.co/XHZJ0yMOX3
— Eric Balchunas (@Eric Balchunas) August 11, 2023
Bitcoin ETF
In recent years, the SEC has been hesitant to approve mock Bitcoin ETFs after rejecting several proposals. Such resistance is often anchored in concerns about insufficient commercial oversight, susceptibility to fraudulent activity and potential market manipulation.
Despite this, futures-based Bitcoin ETFs that track the price of BTC futures contracts have recently been sanctioned by regulators.
The cryptocurrency ecosystem has caught the attention of financial giants and has contributed significantly to the market momentum. However, the industry has faced challenges such as the collapse of FTX.
Of particular note was the decision by BlackRock, the world’s largest asset manager, in June this year to file a bitcoin ETF application, a move many analysts saw as critical to the cryptocurrency’s continued legitimacy.
It’s worth remembering that in 2021, Cathie Wood’s ARK joined forces with investment specialist 21Shares US LLC to propose a spot Bitcoin ETF to the SEC. With the decision postponed, the industry now has to wait until September to know if the first Bitcoin spot ETF will be approved.
SEC continues to reject Bitcoin ETF
The landscape doesn’t look good for ETFs in the Bitcoin spot market, despite continued registrations from giants like BlackRock and other big players on Wall Street. The nomination came from former SEC attorney John Reed Stark, who hinted that the SEC will maintain its strict and conservative stance against Bitcoin spot ETFs.
The non-profit organization Better Markets, in line with the SEC’s opinion, has raised concerns about the manipulative nature of Bitcoin spot markets, mainly due to inflated volumes and high concentration.
The entity cautioned that these characteristics make a Bitcoin spot ETF vulnerable to manipulation, endangering investors and the public interest. Oversight of other markets was considered insufficient to limit these risks.
Since 2013, the SEC has consistently rejected requests for spot Bitcoin ETFs, although it has been more receptive to Bitcoin futures ETFs. Financial giants like BlackRock have filed applications, hoping for a positive response.
Stark speculated in a Twitter commentary that changes to the SEC’s cryptocurrency regulations could be coming after the 2024 presidential election.
In his view, if a Republican candidate is elected, the GOP administration could take a softer stance on cryptocurrencies, potentially accelerating ETF approval.
Stark also predicted that under Republican leadership the SEC could slow enforcement actions.
Several applications for spot ETFs, including those from BlackRock, VanEck, WisdomTree and Invesco, are awaiting an SEC decision, expected on September 1. However, Bloomberg analysts believe the SEC will likely extend that date, prolonging the tension surrounding such requests.
Meanwhile, Bitcoin takes a slight dip in the market, trading at $29,381.
Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
