ARK Invest’s Bitcoin ETF Application Process May Be Extended by SEC

• ARK Invest’s official Bitcoin ETF application triggered the countdown clock for the SEC on May 15th.
• ARK Invest CEO Cathie Wood mentioned that there is a high possibility that the SEC could further delay the matter.
• The approval of leveraged Bitcoin ETFs and the increase in Ethereum futures ETF applications indicate a changing regulatory environment.

ARK Invest’s spot Bitcoin ETF application comes ahead of other applications, but the SEC could extend the decision-making process for this ETF.

Extended Review Possible for ARK Invest’s Bitcoin ETF

ARK Invest’s official Bitcoin ETF application triggered the countdown clock for the SEC on May 15th. This followed another application made on June 15th, and the SEC set the final date by which it should express approval or denial as August 15th. However, the SEC could prolong the waiting game for up to 240 days by extending the final response date to January 10th, 2024, for ARK Invest’s proposal and March 2024 for other applicants.

ARK Invest CEO Cathie Wood mentioned that there is a high possibility that the SEC could further delay the matter. When asked about the August end date, Wood responded:

“I think August 13th will come and go. If the SEC is going to approve a Bitcoin ETF, they will approve more than one at a time.”

ARK is not the only player striving for a spot Bitcoin ETF. Several institutions, including Bitwise, BlackRock, VanEck, WisdomTree, Valkyrie, First Trust Galaxy, and Fidelity Wise Origin, have also entered the Bitcoin ETF race. Grayscale is also aiming to convert its Bitcoin Trust into an ETF. If the SEC approves any of these applications, the call for fair and equal approvals among other applicants could gain more momentum.

This wave of applications stands out due to the “surveillance sharing” agreement with exchanges like Nasdaq and Cboe. The aim of the agreement is to exchange market trading data, customer identity information, and clearing activity details. This step aims to reduce market manipulation risks and protect investor funds against unauthorized use, addressing previous SEC concerns.

SEC’s Waiting Strategy

Observers believe that the SEC won’t back down unless pressured. The Grayscale Bitcoin Trust case serves as an inspiration for dealing with the agency and its determined stance on ETFs. The court case clarified the agency’s stance and highlighted its approval of Bitcoin futures contracts containing similar surveillance provisions. This legal battle could lead to a more transparent decision-making process.

While optimism grows within the crypto community, doubts still linger about the SEC’s approval of a spot Bitcoin ETF. Critics recall the SEC’s tradition of rejecting such applications. However, the approval of leveraged Bitcoin ETFs and the increase in Ethereum futures ETF applications indicate a changing regulatory environment. Bloomberg Intelligence, considering the Grayscale case and potential political impacts, assesses the approval likelihood at 65%.