Bloomberg’s senior ETF analyst says there are “good” signs that a Bitcoin ETF will be approved soon. He noted that Ark Invest applied for a bitcoin futures ETF with the designated symbol, and Valkyrie updated its ETF prospectus with the symbol.
Cathie Wood’s Ark Investment Management LLC has filed for a bitcoin futures ETF under the symbol ARKA, while Valkyrie has assigned its BTC futures prospectus the symbol BTF.
According to Bloomberg analyst Eric Balchunas, companies typically update their proposals when everything is in place and "ready to roll out," which means the SEC may soon give the Valkyrie the green light.
Balchunas also noted that Ark Investments, in partnership with 21Shares and Alpha Architect, filed a bitcoin futures ETF application on Oct. 13, noting that the designated ARKA code is “another good sign” that the U.S. SEC is prepared to grant approval.
People keep asking me what the first thing I look for in order to confirm US SEC approval is this type of updated prospectus. That's what happens pre-launch, they fill out all the paperwork and add code. Having said that, it's Bitcoin, so who knows, lol.
— EricBalchunas (@EricBalchunas) October 13, 2021
Referring to Valkyrie's ETF, the analyst added that he would look for "this type of" updated prospectus filing when determining whether it will receive formal U.S. SEC approval, saying applicants typically look at " Just before launch" update with final details. But he acknowledged that in the crypto space, nothing is certain.
Permabear Mr Whale downplayed the significance of the Ark Investment news, saying that all Ark Investment had done was update its “ARKW ETF Prospectus,” stating that it may gain exposure to BTC through a Canadian exchange-traded fund.
However, Ark Investments’ latest ETF filing with the US SEC does not mention the word “Canada,” and the application clearly outlines that the fund is seeking to invest in the Chicago Mercantile Exchange’s (CME) “USD cash-settled exchange.” Trade bitcoin futures contracts.”
It's also worth noting that this is the second direct application document without the word "Canada." It only invests in futures, not BTCC or GBTC options. Rumor has it that the US SEC doesn't like that and wants them to be full futures.
— EricBalchunas (@EricBalchunas) October 13, 2021
The price of Bitcoin has risen 28% since the beginning of October, and as of this writing, the price of Bitcoin is around $57,500. Many onlookers have attributed bitcoin's recent rally to expectations that the U.S. SEC will soon approve a futures-based bitcoin ETF.
Balchunas said earlier this month that an ETF backed by bitcoin futures is likely to be approved in October. They are regulated by the Investment Company Act of 1940, which is favored by the U.S. SEC because it offers greater consumer protection than physically-backed bitcoin ETFs regulated by the Securities Act of 1933, he said.
“Yes, the U.S. SEC has taken delays in approving a Bitcoin ETF, but this is a physical-backed ETF regulated by the Securities Act of 1933,” he said, adding:
“Futures ETFs filed under the Investment Company Act of 1940 (which Gen Z loves) are very viable and likely to be approved on schedule (we put a 75% chance of approval in October).”
Opinions vary, though. Todd Rosenbluth, senior director of ETF and mutual fund research at research firm CFRA, said this week that he thinks the approval of a BTC futures ETF could be delayed until 2022.
In an interview with CNBC's ETF Edge show, Rosenbluth said the current murky regulatory environment could cause further delays, with the SEC likely waiting to approve all ETFs at the same time to avoid "first-mover advantage."
“It is possible — in fact, we think it is likely — that we will see bitcoin futures ETF approvals delayed until 2022 until there is more clarity on the regulatory environment,” he said.
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