Cathie Wood and Mike Novogratz, CEOs of crypto asset management firms ARK Invest and Galaxy Digital, both expect the U.S. Securities and Exchange Commission (SEC) to soon approve all of the spot Bitcoin (BTC) exchange-traded fund applications.
Speaking in an interview with Bloomberg TV on Monday, Wood said that if the financial regulator is going to approve a Bitcoin ETF, it will be approving more than one at a time.
Meanwhile, Novogratz, during a company earnings call, cited sources from inside BlackRock and Invesco who said it was a question of “when” and not “if” the agency will approve one of the eight outstanding Bitcoin ETF applications. The Galaxy Digital CEO expects the first spot BTC exchange-traded funds to be launched in four to six months’ time.
With a Bitcoin spot ETF, institutional and individual traders will be able to gain exposure to Bitcoin by investing money into a fund that purchases the asset for them, instead of directly buying, storing, and selling BTC on a crypto exchange. The instrument is helpful for those who lack the know-how of the volatile crypto market.
Seven Spot Bitcoin ETF Applicants Await the SEC’s Approval
The seven Bitcoin ETFs currently in play are iShares by BlackRock, WisdomTree, Invesco Galaxy Bitcoin ETF, Valkyrie, ARK21Shares, VanEck SolidX Bitcoin Trust, and Fidelity Wise Origin.
On June 15, BlackRock, the world’s largest asset manager with over $9 trillion worth of assets under management, shook the crypto world to its ground after announcing a filing with the SEC for a Bitcoin spot ETF.
The company, which has been skeptical of Bitcoin and crypto in the past, partnered with Coinbase and appointed the crypto exchange to be its Bitcoin custodian and spot market data provider while banking giant BNY Mellon was appointed as the cash holder for the trust.
New York-based asset manager WisdomTree, which already runs a Bitcoin ETF on Switzerland’s SIX stock exchange, sent in its application a few days before BlackRock’s filing. The company had made prior spot BTC ETF filings with the SEC in 2021, which were rejected.
In March 2021, WisdomTree filed an S-1 with the agency proposing the listing of WisdomTree Bitcoin Trust shares on the Cboe BZX Exchange under the ticker BTCW.
Novogratz’s Galaxy Digital partnered with investment management firm Invesco and filed for a joint Bitcoin ETF in September 2022, called the Invesco Galaxy Bitcoin ETF. What makes the company’s offering stand out from the rest is that it would be physically backed by BTC rather than using derivatives like Bitcoin futures.
Asset manager Valkyrie filed for a Bitcoin ETF in June. The product would be linked to the Chicago Mercantile Exchange’s (CME) reference price for Bitcoin to be traded on NYSE Arca – an exchange specialized in trading ETFs.
Digital bank Xapo signed on to become the custodian for the fund’s Bitcoin. Prior to this, Valkyrie had filed for Bitcoin spot ETF in 2021 which was first delayed and then rejected by the SEC.
Investment firm Ark Invest partnered with Swiss-based ETF provider 21Shares AG to release the ARK 21Shares Bitcoin ETF. The company headed by Cathie Wood filed its first application with the SEC in June 2021 but was rejected in early 2022.
The company’s second filing was also rejected earlier this year. In its third attempt, Ark Invest included details of a surveillance-sharing agreement (SSA) it made with an unknown crypto trading platform. The ARK 21Shares Bitcoin ETF is currently under SEC’s consideration.
ETF and mutual fund manager VanEck is one of the earliest applicants for the spot Bitcoin ETF. The company made its first attempt way back in 2018, a second try in 2021, and a third attempt in 2022, all of which were rejected by the SEC.
VanEck refiled its latest application on June 22 to launch the VanEck Bitcoin Trust, with the shares being traded on the Cboe BZX exchange. The listing has since been added to the SEC’s official calendar for approval.
Investment giant Fidelity first applied its WiseOrigin Bitcoin Trust ETF for the SEC’s approval in March 2021 but it got rejected in January 2022. The company then refiled its application in June 2023 after naming Coinbase as the trading and listing platform under the SSA.
WiseOrigin Bitcoin Trust was added to the SEC’s calendar on the same day as BlackRock’s application. WiseOrigin trust will be administered by Fidelity Service Company Inc., while the Bitcoin backing the fund will be under the custody of Fidelity Digital Assets – the company’s crypto asset management arm.
SEC Accused of Discriminating Against Some ETF Applicants
The crypto world’s wait for its first ETF product goes on as the SEC is yet to greenlight any of the applications. However, big names in the industry like digital asset manager Grayscale, which is the largest corporate holder of Bitcoin, got its latest BTC spot ETF application rejected by the securities watchdog.
In June, Grayscale filed a lawsuit against the SEC accusing it of discriminatory actions against the company. The crypto asset manager alleged that the regulator was approving similar products from companies like BlackRock and Fidelity while rejecting its application without providing a legitimate reason.
Commenting on the lawsuit, Cathie Wood said the SEC will lose the case, and questioned the agency’s decision to approve a Bitcoin futures ETF but not a Bitcoin ETF. The financial regulator approved the launch of the first Bitcoin futures ETFs in October 2021, almost two years ago.
She argued that if the SEC was worried about consumer protection, then it would not have approved a Bitcoin futures ETF as they are “swaps spaces” where counterparty risks exist.
This according to her is not something investors will have to undergo with a Bitcoin spot ETF as it will be backed 1:1 with physical Bitcoin in a cold storage approved by the agency.
Crypto Investors Are Bullish About Bitcoin ETFs
Despite repeatedly denying Bitcoin ETFs in the past, investors are extremely bullish on the SEC to accept applications this time around because industry giants like BlackRock and Fidelity are involved.
The market even experienced a slight uptick, with Bitcoin briefly crossing the $30,000 mark in June, after BlackRock announced its decision to enter the crypto economy.
At the time of writing this article, Bitcoin (BTC) was trading at $29,497 – up 0.1% in the last 24 hours.