The U.S. Securities and Exchange Commission (SEC) has extended its review period for the Ark 21Shares Bitcoin ETF application. This move is in line with the SEC’s ongoing evaluation of applications from major financial institutions, including BlackRock and Fidelity.
The SEC’s order for public input on the Ark 21Shares Bitcoin ETF application is a routine procedure that typically postpones any decision for several weeks. The regulatory body has a maximum of 240 days from the start of a review to make a final decision. The public has been granted three weeks to provide feedback on the proposal, followed by an additional five-week period to respond to the initial comments.
The proposal, submitted by Cboe BZX, emphasizes that the CME Bitcoin Futures market is a regulated market of significant size. It also addresses concerns previously raised by the Commission, suggesting that investor protection issues outweigh potential manipulation concerns.
Ark Investment Management and 21Shares have been pursuing ETF approval since 2021. Their initial application was followed by a second attempt, which the SEC declined. Historically, the SEC has been hesitant to approve spot bitcoin ETF products, citing potential market manipulation and insufficient consumer protections.
An approved ETF would enable a wider segment of the general investing public to trade and hold the value of bitcoin without directly owning the digital asset.
Cathie Wood, CEO of Ark Invest, recently mentioned in an interview with Bloomberg that she anticipated a delay in the decision on their application. However, she remains optimistic that the SEC will approve multiple applications simultaneously. Wood emphasized the depth of their research, which has been ongoing since 2015.
On the other hand, Scott Farnin, legal counsel at the consumer advocacy group Better Markets, expressed concerns ahead of the SEC’s decision. He highlighted the potential risks associated with the bitcoin ETF applications, pointing to the history of artificially inflated trading volumes in the spot bitcoin markets due to manipulation and wash trading.
Upon the news release, Bitcoin’s price experienced a brief surge of about $100 but soon returned to its intraday trading price, hovering around $29,500.
Recent Surge in Bitcoin ETF Applications
The cryptocurrency market has witnessed a growing interest in Bitcoin ETFs. These financial products aim to offer investors exposure to Bitcoin without the need to directly own or store the cryptocurrency. The SEC’s cautious approach to these applications stems from concerns about market manipulation, liquidity, and investor protection.
However, the increasing number of applications indicates a strong demand from institutional investors and a potential shift in the regulatory landscape. As the crypto market matures, it remains to be seen how the SEC will navigate the balance between innovation and investor protection.
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