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ARK and 21Shares Revise Bitcoin ETF Applications Amid SEC Feedback

ARK Investment Management and 21Shares update Bitcoin ETF applications, indicating a shift in SEC's stance, with potential market-wide approvals expected by January 2024.
Published on 2023-10-12

SEC's Evolving Stance on Bitcoin ETFs

ARK Investment Management, steered by Cathie Wood, along with 21Shares, has made notable amendments to their Bitcoin Exchange-Traded Fund (ETF) applications. These changes come in response to feedback from the U.S. Securities and Exchange Commission (SEC), showcasing a shift in the regulatory body's stance on spot Bitcoin ETFs.

Comprehensive Revisions to ETF Applications

The revised ETF filings now present a more detailed prospectus. This includes a thorough explanation of the ETF's structure, asset custody procedures like individual wallets for each Bitcoin, and valuation methods. The introduction of segregated accounts on the Bitcoin blockchain for asset holding is another key feature. These enhancements indicate ongoing dialogue with the SEC, suggesting a move towards potential approval.

Market Optimism and Analyst Insights

Analysts from Bloomberg have interpreted these updates positively. The prospectus has grown by five pages, indicating ARK's comprehensive response to SEC queries. Such developments are seen as promising steps towards eventual approval.

Grayscale's Pivotal Deadline

Grayscale Bitcoin Trust (GBTC) faces a crucial deadline following a New York court's ruling against the SEC's previous refusal of its spot Bitcoin ETF application. The SEC is required to decide by January 10, 2024. GBTC's decreasing Net Asset Value (NAV) discount underscores market anticipation of a favorable SEC decision.

Theories on SEC Approval Strategy

Two main theories are circulating about the SEC's potential course of action. The regulator might approve all compliant applications or opt for simultaneous approvals to prevent any applicant from securing a first-mover advantage. Market consensus leans towards mass approval by January 2024, with early approvals unlikely and rejections improbable, given the SEC's proactive engagement and GBTC's NAV recovery.

Overall, these developments highlight significant progress in the Bitcoin ETF landscape, with stakeholders optimistic about future approvals.

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