US SEC and Financial Firms Now Discussing ‘Key Technical Details’ of Spot Bitcoin ETF Applications: Report

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ARK’s Cathie Wood Says Bitcoin Looking ‘As Good as it Gets,’ On-Chain Metrics Looking Like a Bull Market

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Ark Invest and 21Shares partner to launch digital asset ETF suite

November 9, 2023 Coin Telegraph

Ark Invest

Five digital asset ETF products will be listed on the Chicago Board Options Exchange and are scheduled to start trading next week.

Investment management firm Ark Invest, led by pro-Bitcoin investment veteran Cathie Wood, has collaborated with exchange-traded product (ETP) provider 21Shares to launch a new suite of digital asset exchange-traded funds (ETFs). The move aims to provide a “robust set of options" for investors looking to get digital assets into their trading portfolio.

The countdown begins: today, 21Shares and ARK Invest announce the upcoming launch the ARK and 21Shares Digital Asset ETF Suite.

The ETF suite uses crypto-specific insights alongside traditional indicators. pic.twitter.com/dkg8aTCtVR
— 21Shares Funds (@21shares_funds) November 8, 2023

According to the 21Shares website, the companies will utilize on-chain signals and their crypto-native experience to deliver “long-term capital appreciation” by investing in Bitcoin (BTC) and Ether (ETH) futures contracts.

According to the prospectuses released by the companies, five products are scheduled to start trading in the next week. Furthermore, these ETFs will be listed on the Chicago Board Options Exchange (CBOE).

The company also underscored that it will not be offering investors a chance to invest directly in “spot” BTC. In a disclaimer, the company highlighted that investors seeking exposure to the price of BTC should consider other forms of investments.

Apart from Bitcoin and Ethereum futures, one product called the "ARK 21Shares Blockchain and Digital Economy Innovation ETF" is also designed to invest in public equities of companies within the blockchain industry. According to 21Shares, this provides investors with what it describes as a "holistic exposure” to the growth of blockchain technology.

Meanwhile, Bloomberg analysts speculate that the United States Securities and Exchange Commission (SEC) has a window to approve Bitcoin ETF filings. On Nov. 8, analysts James Seyffart and Eric Balchunas wrote that there was a possibility that the SEC could approve all 12 ETF filings if the agency decides to allow the concept. However, the analysts also stressed that this was only a possibility and that there was nothing concrete yet.

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ARK’s amended spot Bitcoin ETF filing is a ‘good sign’ of future approval

October 12, 2023 Coin Telegraph

21shares

ARK Invest and 21Shares amended spot Bitcoin ETF filing seemingly addresses earlier concerns highlighted by the SEC, which is a good sign of progress, according to Bloomberg's ETF analysts.

A recent amendment to ARK Invest and 21Shares’ joint spot Bitcoin (BTC) exchange-traded fund (ETF) application could be seen as a “good sign” of progress and impending approvals.

An amended Oct. 11 filing to the Securities and Exchange Commission for approval adds additional information about the proposed spot Bitcoin ETF, including practices for how the fund will custody assets and determine asset values.

Bloomberg senior ETF analyst Eric Balchunas said the changes could be in direct response to concerns the SEC has asked ETF issuers to address.

“It means ARK got the SEC's comments and has dealt with them all, and now put [the] ball back in [the] SEC's court,” Balchunas said. “[In my opinion] good sign, solid progress.”

There's 5 extra pages in new S-1 but the new stuff is sprinkled throughout like the two above egs. So what does this mean? It means ARK got the SEC's comments and has dealt with them all, and now put ball back in SEC's court. IMO good sign, solid progress.
— Eric Balchunas (@EricBalchunas) October 11, 2023

Balchunas said the changes are “sprinkled throughout,” making the new filing five pages longer, adding in a separate post that “none of the comments were that new or insurmountable.”

Changes included ARK noting the fund’s net asset value (NAV) calculations are not in line with the Generally Accepted Accounting Principles (GAAP) — an accounting standard used by the SEC, said Balchunas.

The new filing also clarifies the ETFs assets, held by Coinbase Custody, are in “segregated accounts [...] And are therefore not commingled with corporate or other customer assets."

This is also new (and again something we heard SEC asked about): "The Trust’s assets with the Custodian are held in segregated accounts on the bitcoin blockchain, commonly referred to as “wallets,” and are therefore not commingled with corporate or other customer assets." pic.twitter.com/57TmnNi1lE
— Eric Balchunas (@EricBalchunas) October 11, 2023

Fellow Bloomberg ETF analyst James Seyffart added in and X post the latter change signals that ARK and others are communicationg with the SEC about what the regulator wants cleared up.

“Good sign for future approval IMO,” he added.

Van Buren Capital general partner Scott Johnsson noted another new addition was a comment that if BTC is increasingly used for illegal purposes and if Bitcoin mining’s environmental impact causes it to be restricted then the ETF’s value could fall.

Still chuckling a bit at this “electricity usage” risk factor. Ark couldn’t even be bothered to put in a coherent header summary or more than a couple short sentences. You know the convo w/ the SEC was like “oh yea, good call Mr. SEC attorney, this is definitely material /s” https://t.co/unIArFDKl8
— Scott Johnsson (@SGJohnsson) October 12, 2023

Johnsson said based on ARK’s amendments it “doesn't look like the agency is putting up any unnecessary roadblocks via disclosure review.”

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VanEck, ARK filings ‘officially’ start clock for spot Ethereum ETFs: Analyst

September 7, 2023 Coin Telegraph

19b-4 Form

Bloomberg ETF analyst James Seyffart expects more spot Ethereum ETFs to be filed in the coming days.

The race for the United States’ first spot Ethereum exchange-traded fund has officially begun after new 19b-4 filings by the Chicago Board Options Exchange (CBOE), which will "ultimately start the clock" for an SEC decision.

On Sept. 6, the CBOE filed two 19b-4 applications to the United States securities regulator, requesting for the ARK 21Shares Ethereum ETF and VanEck Ethereum ETF investment products to be listed on CBOE’s BZX Exchange.

In a series of tweets, Bloomberg ETF analyst James Seyffart noted that as opposed to the previously submitted S-1 filings, the 19b-4 filings mean that the countdown for a decision by the SEC is now in motion.

“The Spot #Ethereum ETF Race is officially on,” Seyffart declared, estimating a final deadline around May 23, 2024.

The Spot #Ethereum ETF Race is officially on. It's early but i'd estimate a final deadline on these applications to be around ~May 23, 2024.

Notably, we didn't see a VanEck spot Ethereum ETF S-1 from VanEck earlier because they filed for this thing all the way back in 2021!! pic.twitter.com/jLve8PpPrE
— James Seyffart (@JSeyff) September 6, 2023

A 19b-4 form is filed by self-regulatory organizations — such as a stock exchange — to request a rule change to the U.S. Securities and Exchange Commission, while an S-1 filing only indicates a firm’s intention to list a particular investment product on a national exchange.

The securities regulator is now obligated to review the 19b-4 filings and make a decision, though the SEC can also delay the decision as it has for spot Bitcoin ETFs.

ARK Invest and 21Shares teamed up to file an S-1 to the SEC on Sept. 6, though VanEck’s S-1 filing dates back to July 2021.

Late to the party? We filed our S-1 for a Spot Ether ETF back on 5/7/2021. https://t.co/hYE6TG90Q3
— VanEck (@vaneck_us) September 6, 2023

Meanwhile, Seyffart expects more spot Ethereum ETF filings to come in the coming days.

How long before we see a 19b-4 from @Grayscale to convert $ETHE into an ETF? https://t.co/078sm9FNlF pic.twitter.com/pzSEcMrtZB
— James Seyffart (@JSeyff) September 6, 2023

On Aug. 17, the securities regulator reportedly signaling its intention to approve Ethereum Futures investment products while several firms including Grayscale Investments and BlackRock are currently fighting to get a spot Bitcoin ETF approved.

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Following SEC delays, Ark Invest and 21Shares file for spot Ether ETF

September 6, 2023 Coin Telegraph

Ark Invest

The two firms currently have a spot Bitcoin exchange-traded fund being reviewed by the SEC, and recently proposed listings of two Ether futures ETFs.

Amid the United States Securities and Exchange Commission (SEC) delaying a decision on Ark Investment Management’s spot Bitcoin (BTC) exchange-traded fund, the firm has proposed an investment vehicle with exposure to Ether (ETH).

In a Sept. 6 filing, Ark Invest and 21Shares requested the SEC approve the listing of shares of a spot ETH ETF on the Cboe BZX Exchange. The investment vehicle, called the ARK 21Shares Ethereum ETF, will have crypto exchange Coinbase act as a custodian and measure the performance of Ether based on the Chicago Mercantile Exchange CF Ether-Dollar Reference Rate.

BOOM: ARK just filed for a Spot Ether ETF, the first one.. prob more coming imminent pic.twitter.com/PjK5aSNPlS
— Eric Balchunas (@EricBalchunas) September 6, 2023

The proposal from Ark Invest and 21Shares is one of many spot crypto ETFs that will be reviewed by the SEC. Following asset manager Grayscale winning an appeal to have the SEC reconsider allowing the listing of its Bitcoin Trust converted into a BTC ETF, many firms seem to have been hopeful of regulatory approval.

On Aug. 31, two days following the decision on Grayscale’s ETF, the SEC announced it would delay deciding whether to approve or deny spot Bitcoin ETF applications from 7 firms including BlackRock — the largest in the world. The spot Bitcoin ETF from Ark Invest and 21Shares was not included in the delay as its next deadline on approval, denial, or delays isn’t until Nov. 11.

The current iteration of Ark Invest’s and 21Shares’ Bitcoin investment vehicle is the firms’ third attempt to launch a spot Bitcoin ETF since 2021. In August, the companies also proposed listings of two ETH futures ETFs — ETFs linked to crypto futures have had more success with the SEC following several approvals in 2021.

The price of ETH briefly surged following news of the ETF filing. According to data from Cointelegraph Markets Pro, the ETH price rose roughly 3% from $1,623 to $1,669 before returning to between $1,620 and $1,640.

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