ARK Invest CEO Cathie Wood says that the odds of a January 2024 approval of a spot Bitcoin (BTC) exchange-traded fund (ETF) in the US are going up. In a new interview on Bloomberg Television, Wood says that engagement between ARK Invest and the U.S. Securities and Exchange Commission (SEC) over its ETF application is […]
The post Probability of a Spot Bitcoin ETF Approval Has Gone Up, Says ARK Invest’s Cathie Wood – But There’s a Catch appeared first on The Daily Hodl.
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.
Related: Bitcoin ETFs: A $600B tipping point for crypto
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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An under-the-radar, low-cap Ethereum (ETH) competitor surged by more than 61% this week as a flurry of exchanges launched perpetual futures contracts for its native asset. Ark (ARK) is an open-source, typescript-based, layer-1 blockchain protocol that aims to be simple and efficient. The project’s native token is trading around $0.607, up from $0.375 one week […]
The post Low-Cap Ethereum Competitor Skyrockets by 61% This Week Amid Flurry of Futures Contract Listings appeared first on The Daily Hodl.
Several macroeconomic indicators suggest that bearish headwinds could strengthen during the remainder of 2023 and possibly negatively impact the crypto market.
2023 has been a whipsaw year for investor sentiment and even though equities markets have defied expectations, a recent report from ARK Invest highlights reasons why the remainder of 2023 could present several economic challenges.
ARK manages $13.9 billion in assets, and its CEO, Cathie Wood, is a strong advocate for cryptocurrencies. In partnership with the European asset manager 21Shares, ARK Investment first applied for a Bitcoin exchange-traded fund (ETF) in June 2021. Their most recent request for a spot BTC ETF, which is currently pending review by the U.S. Securities and Exchange Commission (SEC), was initially filed in May 2023.
Despite ARK’s bullish view on Bitcoin which is supported by their research on how the fusion of Bitcoin and Artificial Intelligence could transform corporate operations by positively impacting productivity and costs, the investment firm doesn't foresee a straightforward path for a Bitcoin bull run given the current macroeconomic conditions.
In the newsletter, ARK cites several reasons for their less than optimistic scenario for cryptocurrencies, including interest rates, gross domestic product (GDP) estimates, unemployment and inflation. One point is that the U.S. Federal Reserve (Fed) is implementing a restrictive monetary policy for the first time since 2009, as indicated by the "Natural Rate of Interest."
The "Natural Rate of Interest" is a theoretical rate at which the economy neither expands or contracts. ARK explains that whenever this indicator exceeds the "Real Federal Funds Policy Rate," it puts pressure on lending and borrowing rates.
ARK anticipates that inflation will continue to slow down, which would drive up the "Real Federal Funds Policy Rate" and increase the gap above the "Natural Rate of Interest." Essentially, the report holds a bearish macroeconomic view due to this indicator.
The analysts also focused on the divergence between real GDP (production) and GDI (income). According to the report, GDP and GDI should closely align, as income earned should equal the value of goods and services produced.
However, the most recent data shows that Real GDP is approximately 3% higher than Real GDI, indicating that downward revisions in production data should be expected.
Another focus point was U.S. employment data and the analysts note that the government has consistently revised these figures downward for six consecutive months.
The chart above highlights a labor market that appears weaker than initial reports indicated. The fact that the last time six consecutive months of downward revisions occurred was in 2007 just before the onset of the Great Financial Crisis is also notable.
Related: Bitcoin short-term holders capitulate as data highlights potential generational buying opportunity
Another bearish development to keep an eye on is “stagflation.” The writers highlight the reversal of the year-long trend of price discounts driven by increased consumer spending. Referencing the Johnson Redbook Index, which encompasses over 80% of the "official" retail sales data compiled by the U.S. Department of Commerce, it becomes clear that total same-store sales rebounded in August for the first time in 12 months, suggesting that inflation may be exerting upward pressure.
The metrics suggest that ongoing macroeconomic uncertainty could continue in the coming months. However, it does not provide a clear answer regarding how cryptocurrency investors might react if this trend confirms lower economic growth and higher inflation – a scenario typically considered highly unfavorable for risk-on assets.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Cathie Wood, CEO of Ark Invest, shares her views on the intersection of Bitcoin and Artificial Intelligence, highlighting its economic implications.
In a recent Twitter post, Cathie Wood, CEO of Ark Invest, expressed her positive view on the intersection of Bitcoin (BTC) and artificial intelligence (AI)
In her tweet, Cathie Wood subtly hinted at the immense transformative potential inherent in the dynamic synergy between artificial intelligence and Bitcoin, emphasizing the possibilities and positive implications these technologies hold for diverse industries and the overall economic landscape. Her enthusiasm serves as a testament to the rapid and ever-evolving nature of both the cryptocurrency and artificial intelligence sectors.
The convergence between Bitcoin - and AI could transform the way companies organize, causing a collapse in costs and an explosion in productivity. I was blown away by the possibilities these brilliant entrepreneurs are creating. Look for this podcast on Thursday! https://t.co/kPW92CuhFQ
— Cathie Wood (@CathieDWood) September 2, 2023
Backing Wood's optimistic outlook is a research document published by ARK Invest titled "Investing In Artificial Intelligence." This research serves as a robust indicator that both Cathie Wood and Ark Invest are actively assessing the significance of AI within their investment strategies.
Throughout the years, Cathie Wood has allocated investments to various AI-related stocks, demonstrating her strong belief in the rising technology. Beyond her keen interest in AI, Cathie Wood's enthusiasm for Bitcoin is evident through ARK Invest's endeavors concerning the Bitcoin ETF. Furthermore, besides Bitcoin, ARK Invest has substantial holdings in Coinbase and Robinhood, solidifying its presence in the cryptocurrency industry.
Related: Bitwise withdraws Bitcoin and Ether Market Cap ETF application
The document also highlights Ark Invest's strategies that have reaped rewards from investments in artificial intelligence tech stocks. The ARK Disruptive Innovation ETF (ARKK), dedicated to AI and other pioneering technologies, outperformed the NASDAQ 100 Index (QQQ), achieving a significant mid-year profit of 41.2%.
Wood's tweet, along with Ark Invest's research, illustrates the increasing influence of AI in the realm of investments. The fusion of Bitcoin and AI has the potential to trigger a profound transformation in corporate operations, potentially reshaping productivity and cost dynamics. As investors explore fresh avenues for growth, Wood's optimism serves as a persuasive signal of the vast possibilities emerging at the intersection of cryptocurrency and artificial intelligence.
Cathie Wood, the Bitcoin advocate, is actively investing in Meta Platforms (META) and Robinhood Markets (HOOD) shares.
As the stock price of Coinbase (COIN) reaches a 52-week high, Ark Invest, the investment management firm led by Bitcoin (BTC) bull Cathie Wood, has recently divested more of its Coinbase shares.
Following Ark Invest's significant acquisition of Coinbase shares during the bear market, the investment firm has recently sold off a portion of its Coinbase holdings for the second time this week. In the meantime, Cathie Wood, the prominent Bitcoin advocate, is actively investing in Meta Platforms (META) and Robinhood Markets (HOOD) shares.
Trade information observed by Cointelegraph reveals that on July 14, Cathie Wood's Ark Invest funds divested a total of 478,356 Coinbase (COIN) shares valued at $53 million, coinciding with the stock's yearly high of $114.43.
In the transactions, Cathie Wood's flagship fund ARK Innovation ETF (ARKK) divested 263,247 COIN shares, ARK Next Generation Internet ETF (ARKW) sold 93,227 COIN shares, and ARK Fintech Innovation ETF (ARKF) offloaded 35,666 COIN shares.
In June, Cathie Wood initiated the purchase of Meta Platforms shares after the company announced the launch of "Threads," a social media app similar to Twitter. ARK Innovation ETF (ARKK) acquired 69,793 META shares, while ARK Fintech Innovation ETF (ARKF) purchased 111,843 shares of Robinhood. Additionally, ARK Next Generation Internet ETF (ARKW) increased its holdings with 12,559 META shares and 169,116 Robinhood shares.
As per CoinMarketCap, the closing price of COIN stock on Friday stood at $105.31, experiencing a 1.58% decline as investors secured their profits. During the week, COIN price surged by 33%, reaching a 24-hour high of $114.43, and displaying an impressive year-to-date increase of 213%. In addition to the overall upswing in crypto-related stocks, Coinbase witnessed a notable rise following the summary judgment in the US SEC v. Ripple lawsuit.
Related: Allowing Coinbase to go public was not a ‘blessing’ from regulators — SEC
Cathie Wood’s ARK Innovation ETF (ARKK) sold 135,152 Coinbase (COIN) shares worth $12 million on July 11 and ARK Fintech Innovation ETF (ARKF) sold 160,887 Coinbase (COIN) shares in March.
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ARK Invest and 21Shares' third application for a spot Bitcoin ETF now includes a surveillance sharing agreement.
ARK Investment Management has amended its spot Bitcoin exchange-traded fund (ETF) application with the U.S. Securities and Exchange Commission (SEC), making it similar to BlackRock's recent filing.
The amendments include a surveillance sharing agreement with the Chicago Mercantile Exchange (CME) futures markets and crypto exchange, most "likely Coinbase", said Bloomberg's ETF analyst Eric Balchunas on Twitter.
In the race for the first Bitcoin ETF in the United States, ARK's filing update puts it ahead of its competitors.
JUST IN: ARK has amended their 19b-4 for spot bitcoin ETF to include a surveillance sharing agreement bt CBOE and a crypto exchange (likely Coinbase), which makes their's like BlackRock's filing now, and puts them in pole position to be approved first bc they filed first. pic.twitter.com/P8PCmPdhln
— Eric Balchunas (@EricBalchunas) June 28, 2023
The investment company of Cathie Wood and the European asset manager 21Shares requested approval for a spot BTC ETF a third time in April, after previous applications were denied in 2021 and 2022. As a reason for the rejections, the regulator noted that it did not meet the rules of practice and Exchange Act requirements for listing a financial product.
Speaking in a recent interview, Bloomberg Intelligence ETF analyst, James Seyffart, confirmed that ARK's request is the front-runner for a Bitcoin ETF. “21Shares, ARK and Cboe [Chicago Board Options Exchange] are first in line because their next SEC decision date is Aug. 13, 2023, and we don’t yet have a date for the other 19b-4 applications like the one from BlackRock,” he noted.
Even if ARK receives approval in the coming weeks, the BTC ETF saga may not be over, as it still needs to appoint a crypto exchange to enter into a surveillance sharing agreement. Although Coinbase may be a strong candidate for this position, the company has already partnered with BlackRock to become a Bitcoin custodian should approval be granted.
"Would BlackRock [...] even allow Coinbase to enter into a SSE agreement with another that would help another issuer beat them to market? If so ARK would need another crypto exchange to use," Balchunas continued on Twitter.
BlackRock joined the long line of applicants on June 16, triggering a wave of similar initiatives on Wall Street, especially from previous applicants. Financial investment firms such as Valkyrie, WisdomTree, and Invesco have re-filed for spot Bitcoin ETFs in the past few days.
Cointelegraph reached out to ARK Invest but did not receive an immediate response.
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ARK Invest filed for a spot Bitcoin ETF in collaboration with 21Shares long before BlackRock did, and its application is reportedly first in line for the SEC’s approval.
ARK Investment Management, a pro-Bitcoin (BTC) firm founded by veteran investor Cathie Wood, is reportedly ahead in the race for a spot BTC exchange-traded fund.
In mid-June, the investment firm BlackRock filed an application for a spot Bitcoin ETF, triggering notable optimism on cryptocurrency markets.
A number of reports suggested that BlackRock could become the first issuer of a spot Bitcoin ETF in the United States, should it receive approval. That might not be the case, according to some executives and analysts.
“Other applicants will be able to amend their filings with similar agreements at little cost,” ARK analyst Yassine Elmandjra reportedly wrote.
Elmandjra stressed that ARK and the European asset manager 21Shares filed an application with the U.S. Securities and Exchange Commission (SEC) for a spot Bitcoin ETF in April. “That now is the only one ahead of BlackRock’s,” he added.
More industry observers, including Bloomberg Intelligence ETF analyst James Seyffart, also argued that ARK and 21Shares should be ahead of anyone for a spot Bitcoin ETF.
“21Shares, ARK and Cboe are first in line because their next SEC decision date is Aug. 13, 2023, and we don’t yet have a date for the other 19b-4 applications like the one from BlackRock,” Seyffart stated.
BlackRock’s filing for the iShares Bitcoin Trust has triggered a wave of reactivated Bitcoin ETF filings. Companies like crypto fund manager Valkyrie, WisdomTree and Invesco shortly re-filed for spot Bitcoin ETFs, with Bitwise also reportedly trying once again for a BTC ETF.
“And our bull case for spot bitcoin ETF approval can basically be summed up in four words: ‘What does BlackRock know?” Bloomberg senior ETF analyst Eric Balchunas wrote on Twitter. ETF Institute co-founder Nate Geraci took to Twitter on June 26 to express similar sentiments.
Many industry observers have highlighted timing for BlackRock’s spot Bitcoin ETF filing, with some allegeding that the firm could have insider information about the SEC’s BTC ETF policies.
New t-shirt drop via @EricBalchunas…
— Nate Geraci (@NateGeraci) June 26, 2023
I will say, seems hard to believe this is all coincidence:
BlackRock files for spot btc ETF
4 other issuers quickly follow suit
EDX crypto exchange launches (backed by Fidelity, Schwab, etc)
2X leveraged btc futures ETF allowed by SEC pic.twitter.com/5CfG7ThcLg
Despite growing optimism over potential arrival of a spot Bitcoin ETF to the U.S. market, many experts believe that such products are not coming in the near future.
The SEC is unlikely to approve a spot Bitcoin ETF in 2023 as it hasn’t progressed much since Winklevoss twins filed for one back in 2017, Wilshire Phoenix's partner Wade Guenther told Cointelegraph.
Related: Bitcoin ETF fever returns: Biggest inflow to ProShares’ BITO in a year
“There really hasn't been a lot of development since the first time many of these sponsors filed their initial spot Bitcoin ETFs,” Guenther said, adding:
“We don't believe that a spot Bitcoin ETF will be available to the public anytime soon because there's still a certain amount of time for review. So it could be not until next year, potentially the year after that we could see a spot Bitcoin ETF.”
Previously, ETF Institute co-founder Geraci predicted that the world would not see a spot Bitcoin ETF in 2023.
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News of regulatory enforcement against the crypto sector fell to the wayside as Bitcoin price rallied above $30,000, and options data suggests the trend will continue.
Bitcoin's (BTC) 15% rally toward $30,300 between June 19 and June 21 caught most traders by surprise, triggering $125 million in liquidations of leveraged short futures contracts. Narrowing down the trigger for the rally is complicated, but some analysts point to the potential inflow of institutional investors if Blackrock’s exchange-traded fund (ETF) application gets regulatory approval.
BlackRock just filed with the SEC to create a spot #Bitcoin ETF.
— Joe Consorti ⚡ (@JoeConsorti) June 15, 2023
Given their reputation, this has the highest likelihood of happening out of all the attempts at a spot ETF so far.
The institutional liquidity floodgates may finally open https://t.co/c9g2Ten1h8 pic.twitter.com/L2NmXq11gL
ARK Invest CEO and chief investment officer Cathie Wood explained the rationale for the firm’s bullishness on Bitcoin price, more specifically their $1 million target. According to Wood, even in a deflationary environment, Bitcoin can still outperform by offering a solution to the traditional financial system’s counterparty risk.
Furthermore, the negative regulatory pressure eased on June 16 after Binance exchange was able to strike a temporary agreement with the U.S. Securities and Exchange Commission (SEC) to avoid a potential asset freeze. The event further cemented Bitcoin bears’ opportunity to profit on the $715 million weekly BTC options expiry.
Bitcoin’s price dropped below $26,300 on June 10, fueling bearish bets by traders using option contracts. Such a level was only recouped on June 16, which explains why bears have concentrated their bets on Bitcoin prices trading below $27,000.
The 0.82 put-to-call ratio reflects the difference in open interest between the $415 million call (buy) options and the $300 million put (sell) options. However, the outcome will be lower as bears were caught by surprise as Bitcoin gained 10% in two days.
For instance, if Bitcoin's price remains near $29,800 at 8:00 a.m. UTC on June 23, there will be only $5 million in put options. This distinction arises since the right to sell Bitcoin at $28,000 or $29,000 is rendered void if BTC trades above that on the expiry.
Below are the four most likely scenarios based on the current price action. The number of options contracts available on June 23 for call (buy) and put (sell) instruments varies depending on the expiration price. The imbalance favoring each side constitutes the theoretical profit:
This rough estimate considers only put options in bearish bets and call options in neutral-to-bullish trades. Nonetheless, this oversimplification excludes more complex investment strategies. A trader, for example, could have sold a call option, effectively gaining negative exposure to Bitcoin above a specific price, but this effect is difficult to estimate.
Related: Singapore MAS proposes digital money standards with major industry players
Bears will likely try to downplay the multiple Bitcoin exchange-traded funds (ETF) applications, including Blackrock’s and WisdomTree’s. Meanwhile, bulls should closely monitor the regulatory changes, including the ongoing Binance exchange’s investigation in France, as the Paris Prosecutor’s Office reportedly cited “acts of illegal exercise of the function of a service provider on digital assets (PSAN), and acts of aggravated money laundering.”
The critical level for the weekly expiration is $28,000, but it is impossible to predict the outcome due to increased cryptocurrency regulatory risks. If bulls are able to profit $250 million or higher, those funds will most likely be used to further strengthen the $28,000 support.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
ARK Invest bought over 400,000 shares of Coinbase stock totaling more than $21 million on the day the SEC served the exchange with a lawsuit.
The same day cryptocurrency exchange Coinbase was served with a lawsuit from the United States Securities and Exchange Commission (SEC), ARK Invest added more stock to its Coinbase holdings.
According to investor notification from ARK Invest on June 6, the firm added approximately 419,324 shares of Coinbase Global Inc., which totals to a worth of nearly $21.6 million at the time of closing on the same day.
This came as Coinbase stock plummeted more than 20% on June 6, following the ongoing action involving the SEC and the recent lawsuit announcement. At the time of writing Coinbase's stock price hovers around $53.11.
The addition of Coinbase stocks to the ARK Invest portfolio follows a trend. About a month prior, on May 2, ARK Invest added an additional 168,869 Coinbase shares, which then equaled around $8.5 million. The firm made investments in March and April as well, of 2.4 million shares for about $117 million and 304,300 shares worth $17.5 million, respectively.
Related: Coinbase exec uses ChatGPT ‘jailbreak’ to get odds on wild crypto scenarios
The recent lawsuit from the SEC against Coinbase accuses the exchange of offering unregistered securities and that it never registered as a broker, national securities exchange or clearing agency.
Coinbase CEO Brian Armstrong took to Twitter in response and said his team is “confident in our facts and the law.” He continued to say that he welcomes the opportunity “to finally get some clarity around crypto rules” in court.
The chief legal officer for Coinbase Paul Grewal, told the U.S. Congress on June 6 that the company has “embraced regulation” since it was founded and that in 2022 alone it met with the SEC 30 times for regulatory guidance.
On June 6th, Coinbase was also issued a Show Cause Order from a task force of state security regulators in states including Alabama, California, Illinois and Vermont, among others. It alleged that the exchange's offering of its staking rewards program is in violation of the securities law.
Magazine: Crypto regulation: Does SEC Chair Gary Gensler have the final say?
