ARK Invest, led by Cathie Wood, and digital asset manager 21Shares recently revised their application for a US-based Bitcoin ETF to include a supervisory sharing deal in a move that appears to be in response to the submission from BlackRock two weeks earlier.
These oversight sharing agreements, planned between the CBOE options exchange and a US-based Bitcoin trading platform, aim to increase market transparency and unify crypto markets with existing US market oversight practices.
The amendment by ARK and 21Shares follows an analysis by ARK’s Yassine Elmandjra, who stated that incorporating surveillance data sharing agreements into existing applications should be relatively simple and inexpensive. This change potentially positions ARK and 21Shares ahead of BlackRock in the race to debut the first US-based Bitcoin ETF, as they filed their application in April.
The SEC’s main concerns with Bitcoin ETFs focused on potential market manipulation, leading to multiple application rejections for physically backed Bitcoin ETFs. According to Bloomberg Intelligence, the regulator has repeatedly expressed the need for supervisory sharing agreements with a “regulated market of significant size.”
BlackRock’s application sparked a significant rally in the cryptocurrency market, with Bitcoin’s value rising more than 21% and crossing $30,000. This rise reflects the influence and prestige of the financial heavyweight in the investment community.
Additionally, a survey by Nomura-backed Laser Digital showed that 96% of the 303 professional investors surveyed, who collectively manage $4.95 trillion, expressed interest in investing in crypto. The survey also revealed positive sentiment towards Bitcoin and Ethereum among 82% of participants, while 88% reported either considering investing in cryptocurrencies or letting their clients do so.
BlackRock’s Bitcoin ETF filing has reignited institutional interest, leading to an optimistic forecast of a new wave of Bitcoin-related financial products from Wall Street. Bitcoin has also been bolstered in the wake of the SEC’s enforcement action against crypto exchanges Binance and Coinbase, in which the regulator directly claims that several notable tokens and projects, including Solana, Cardano, Polygon, and more, are unregistered securities, according to it.
Notably, Bitcoin is not mentioned in either suit, and SEC Chairman Gary Gensler has explicitly stated his view that Bitcoin is the only cryptocurrency that falls short of the definition of security.
However, critics warn that BlackRock’s ETF’s proposed structure is similar to previous failed applications, leading to skepticism about its chances of approval. Still, BlackRock’s move, as the world’s largest asset manager, reflects the increasing demand for Bitcoin exposure among its clientele, which includes some of the world’s largest institutions.