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The expectations for the approval of spot Bitcoin exchange-traded funds (ETFs) by the Securities and Exchange Commission (SEC) are rapidly increasing. Jake Chervinsky, the Chief Policy Officer of the Blockchain Association, stated that all signs indicate that a spot Bitcoin ETF could receive approval from the SEC in the near future.
Attention-Grabbing ETF Regulation from ARK Investment Management
However, the application for a spot Bitcoin ETF, especially by ARK Investment Management, has attracted attention with a notable regulation. Eric Balchunas, a Bloomberg ETF analyst, reported that ARK Investment Management made significant changes to their application file. The SEC had provided feedback on various applications a few weeks ago and encouraged revisions. ARK Investment Management seems to have addressed the SEC’s concerns, particularly regarding Net Asset Value (NAV) calculations, with these amendments.
The updated application file specifically states that the NAV calculation is not in compliance with Generally Accepted Accounting Principles (GAAP). ARK Investment Management also emphasizes that the assets of the Trust are held in segregated Bitcoin Blockchain accounts or wallet addresses, separate from institutional or other client assets.
Balchunas believes that these revisions in the application files are a positive step towards obtaining approval from the SEC, but further discussions may be required on these complex details.
The Likelihood of Approval for Spot Bitcoin ETFs is Increasing
The court’s decision in favor of Grayscale has increased the likelihood of approval for a spot Bitcoin ETF. Analysts evaluate the probability of approval for at least one spot Bitcoin ETF by the end of this year at 75%, and by the end of 2024 at 95%.
In addition to the world’s largest asset management company, BlackRock, other financial giants such as Fidelity, WisdomTree, VanEck, and Invesco/Galaxy are also planning to launch their own spot Bitcoin ETFs. However, the SEC’s recent practice of delaying decisions on ETFs indicates that it still has the authority to postpone ETF applications and caution is necessary.
