- ARK Investment Management’s amendment to its Bitcoin ETF application includes a surveillance-sharing agreement, offering it an advantage in the race for the first Bitcoin Spot ETF in the U.S.
- The outcome of this race is a crucial milestone for the cryptocurrency industry as it could help alleviate regulatory concerns surrounding crypto assets.
Following its recent application modification, ARK Investment Management has established a strategic advantage in the pursuit of the first Bitcoin Spot exchange-traded fund (ETF) approval in the United States. The amendment introduces a surveillance sharing agreement with the Chicago Board Options Exchange (CBOE) and a yet-to-be-confirmed crypto exchange, widely believed to be Coinbase, as per Eric Balchunas, Bloomberg’s ETF analyst.
ARK’s move aligns their application with that of BlackRock, another key contender in the ETF race. The likelihood of their application’s approval has increased due to their early filing in partnership with the renowned institutional investment company, 21Shares.
Historically, the U.S. Securities and Exchange Commission (SEC) has denied previous Bitcoin ETF applications, voicing concerns about inadequate surveillance and regulatory supervision in the cryptocurrency market. The inclusion of a surveillance sharing agreement in ARK’s application offers a potential solution to these concerns. It allows ARK to share surveillance data with both the Chicago Mercantile Exchange (CME) futures markets and the participating crypto exchange, thereby offering the SEC a viable tool to combat fraud and manipulation in the crypto market.
Ophelia Snyder, co-founder of 21Shares, added her insight into the ongoing discussion about ARK Invest’s updated agreement. Snyder emphasized that these surveillance-sharing agreements aim to enhance market transparency and integration, a goal that would be undermined if only a single party were involved.
As the competition continues to intensify, BlackRock might not permit Coinbase to participate in a surveillance sharing agreement that potentially aids a competitor to beat them to the market. If this proves to be a hurdle, ARK would need to identify another crypto exchange to partner with.
Despite the challenges, the introduction of enhanced surveillance measures could indeed provide ARK with a decisive advantage in the race for the Bitcoin ETF approval. However, the road to approval is still fraught with uncertainty.
The broader cryptocurrency industry and the actions of competitive firms will significantly influence the SEC’s ultimate decision. The journey to launch the first Bitcoin ETF in the U.S. remains a tightly contested race, with the winner setting an industry-altering precedent.
In a related development, Cathie Wood’s Ark Invest, a known advocate for Bitcoin, has further diversified its portfolio with a $21 million investment in Coinbase shares, signaling a possible partnership in their ETF bid. Notably, Wood projects Bitcoin’s value to hit the $1 million mark by 2023. This evolving story is sure to keep the crypto market on edge as we await the SEC’s verdict expected in August.