Cathie Wood’s ARK Investment Management says it’s first in line to get potential approval for a spot-Bitcoin ETF, despite industry reasoning positing that BlackRock Inc. might be ahead in the race should any product receive regulatory assent.
BlackRock, whose shock filing for a spot product has rocked crypto markets, might be distinguishing its application with the appendage of a “unique” exchange surveillance-sharing agreement that would look to prevent market manipulation, but “other applicants will be able to amend their filings with similar agreements at little cost,” wrote ARK Investment Management analyst Yassine Elmandjra.
In fact, in April, “ARK and 21Shares filed an application with the SEC for a Bitcoin ETF that now is the only one ahead of BlackRock’s,” Elmandjra said.
BlackRock, the world’s largest asset manager, earlier this month applied for the iShares Bitcoin Trust, for which Coinbase Global Inc., the biggest crypto exchange in the US, would act as custodian. The filing made a splash in crypto markets thanks to the asset-manager’s stature on Wall Street and elsewhere. Bitcoin and other cryptocurrencies have all rallied since.
Meanwhile, when 21Shares, a crypto exchange-traded-products issuer, and ARK refiled in April, they argued that a spot product would offer US investors protections that currently don’t exist.
“21Shares, ARK and Cboe are first in line because their next SEC decision date is 8/13/23 and we don’t yet have a date for the other 19b-4 applications like the one from BlackRock,” said Bloomberg Intelligence ETF analyst James Seyffart. “I would assume Cboe is looking to update their 19b-4 rule change proposal to add a surveillance-sharing agreement with Coinbase if they believe it could be a path to an ETF approval.”
A BlackRock spokeswoman didn’t immediately respond to a request for comment on ARK’s assertions. A Cboe representative also didn’t immediately reply.
To be sure, a spot-Bitcoin exchange-traded fund does not currently exist in the US and regulators have, in the past, been loath to green-light one. In prior instances, the US Securities and Exchange Commission has cited market manipulation, among other reasons, when rejecting such proposals. And this isn’t the first hype-cycle over a potential launch. Crypto fans, who have been yearning for a spot-Bitcoin ETF for years, have been through periods of excitement before, only for regulators to ultimately rebuff all attempts.