The Commission will not approve the spot exchange-traded fund (ETF) based on a number of weighty reasons. Former agency attorney John Reed Stark reached that conclusion.
Stark cited the ‘brilliantly articulated’ arguments of the nonprofit organization Better Markets on this score.
In the expert’s view, the situation could be changed by the victory of a Republican Party representative in the presidential election. In that case, the agency would become much more industry-friendly:
- The SEC would significantly scale back enforcement efforts, focusing primarily on fraud cases;
- The Commission would become more receptive to approving spot Bitcoin ETFs and would be more likely to take other regulatory actions important to crypto firms.
In such a scenario, the current SEC chair would most likely resign, and his powers as acting chair would pass to Hester Peirce.
On June 15, BlackRock filed with the SEC a filing for a spot Bitcoin ETF. Following the financial giant, similar requests arrived from Valkyrie, Fidelity Investments, WisdomTree and Invesco.
Later the Commission rejected all filings because they lacked sufficient information regarding the so-called joint surveillance agreement or details of this mechanism.
Subsequently the aforementioned companies promptly submitted to the agency revised proposals. 14 July the regulator took up applications from BlackRock, VanEck, Invesco, Fidelity Investments and WisdomTree.
The Chicago Board Options Exchange also amended the document for the launch of ARK 21Shares, incorporating a joint surveillance agreement to prevent fraud and market manipulation, copying part of BlackRock’s application. On August 11, the SEC extended the review of this application.
So far the SEC has not granted any approvals for spot Bitcoin ETFs. The Commission has made an exception for similar futures-based products from ProShares and Valkyrie Investments.
However, Bernstein and former chairman of the SEC Jay Clayton assessed the prospects of a new wave of contenders as high.
ARK Invest chief Katie Wood and Matrixport analysts forecast a positive decision on several applications.