ARK Invest and 21Shares are two investment firms that have applied to the US Securities and Exchange Commission (SEC) for permission to establish a spot Bitcoin exchange-traded fund (ETF). After being rejected twice for the same application, the companies are making their third attempt.
A spot exchange-traded fund (ETF), also known as a physical ETF or a cash ETF, is a type of exchange-traded fund that invests directly in the underlying assets that it tracks. A spot Bitcoin ETF, for example, would invest directly in Bitcoin rather than in futures contracts or other derivatives. Therefore, a spot Bitcoin ETF would give investors indirect access to Bitcoin without actually holding the cryptocurrency. The ETF would track the real-time price of Bitcoin without requiring investors to purchase and store the digital currency.
The US Securities and Exchange Commission (SEC) is a government agency in the United States that is in charge of enforcing federal securities laws and regulating the securities industry. Its responsibilities include protecting investors by ensuring that companies and financial professionals provide accurate and complete information, maintaining fair and orderly markets, facilitating capital formation by supervising the registration and disclosure requirements for securities offerings, and regulating investment advisers. The SEC is critical to ensuring that financial markets are fair, transparent, and efficient and that investors have access to accurate and complete information about the companies in which they invest. While the SEC has approved several Bitcoin Futures ETFs that allow investors to gain exposure to BTC's potential future value, it has yet to approve a spot Bitcoin ETF. Because of concerns about fraud and manipulation, the regulator has made it difficult for investment firms to obtain approval for a spot Bitcoin ETF.
Despite these obstacles, Bloomberg ETF analysts predict that a spot Bitcoin ETF could be approved in the United States by mid-2023. They base their forecast on the SEC's proposal to broaden the definition of "exchange," which would subject crypto platforms to SEC oversight. This expansion, however, could take up to a year, delaying the approval of a spot Bitcoin ETF.
Source:
Tom Mitchelhill, 26 April 2023, "Third time’s the charm? ARK and 21Shares again file with SEC for Bitcoin ETF", https://cointelegraph.com/news/third-time-s-the-charm-ark-and-21shares-again-file-with-sec-for-bitcoin-etf
