Cathie Wood of Ark Invest fame has filed an application with the Securities and Exchange Commission (SEC) for a bitcoin-based exchange-traded fund (ETF) through her business.
Another Bitcoin ETF Is Headed to the SEC
Per official paperwork, the point of the ETF would be to track the price of bitcoin. It would also trade under the ticker “ARKB” should it garner approval. Ark is working hand in hand with a firm known as 21 Shares to unveil the ETF.
While this is all fine and dandy, one needs to remember that the SEC has not been particularly kind to bitcoin-based ETFs. The agency has demonstrated an extreme level of closed mindedness, and thus despite years of companies trying their best, the SEC is always quick to send out rejection letters to the likes of Bitwise, Van Eck and several other firms that have tried to unveil crypto exchange-traded funds in the past.
Now, it has gotten to the point that the United States is falling behind. Canada – the country’s neighbor to the north – has ultimately beaten the U.S. to the punch and released two crypto ETFs in recent months, one based on BTC and the other based on Ethereum. Hester Pierce of the SEC – playfully dubbed “Crypto Mom” given her loose stance on bitcoin and crypto regulation – has stated that the agency made a terrible mistake in not being more open when it comes to the prospects of crypto.
Still, this has not stopped the SEC from taking a firm and hard stance against growing crypto innovation. Apparently, however, Wood seems to believe that she can get the agency to change its viewpoint.
The ETF filing states:
The market value of bitcoin is not related to any specific company, government or asset. The valuation of bitcoin depends on future expectations for the value of the bitcoin network, the number of bitcoin transactions, and the overall usage of bitcoin as an asset. This means that a significant amount of the value of bitcoin is speculative, which could lead to increased volatility. Investors could experience significant gains, losses and/ or volatility in the Trust’s holdings, depending on the valuation of bitcoin.
Volatility Is Still an Issue
The SEC has always made it clear that until bitcoin’s volatility is brought under control, regulators will continue to look upon the idea of a crypto ETF with a frown. At the time of writing, there are approximately eight other crypto ETF applications waiting for approval, though considering how much value bitcoin has lost in the previous two months, it is hard to say whether now will be the time in which the SEC finally relieves itself of its inhibitions.
Despite trading at a new all-time high of approximately $64,000 in mid-April, bitcoin has since lost close to 50 percent of its price and is presently trading for just over $36,000.