ARK Invest Enhances Bitcoin ETF Bid with Surveillance Agreement, Intensifying the Competition

ARK Investment Management has made significant amendments to its application for a spot Bitcoin exchange-traded fund (ETF) with the U.S. Securities and Exchange Commission (SEC), putting it ahead in the competitive race. The changes align ARK’s filing with BlackRock’s recent submission, showcasing their determination to secure the first Bitcoin ETF approval.

One notable amendment is the inclusion of a surveillance sharing agreement with the Chicago Mercantile Exchange (CME) futures markets and a crypto exchange, which is speculated to be Coinbase, according to Bloomberg’s ETF analyst Eric Balchunas. This move highlights ARK’s commitment to addressing regulatory concerns and promoting transparency in the market.

ARK Investment Management, led by renowned investor Cathie Wood, along with European asset manager 21Shares, has previously applied for a spot BTC ETF twice, in 2021 and 2022, only to face rejections due to non-compliance with practice rules and Exchange Act requirements. However, their persistence and proactive approach have positioned them as front-runners in the race for a Bitcoin ETF.

In an interview, Bloomberg Intelligence ETF analyst James Seyffart confirmed that ARK’s revised application has gained an advantage, with the next SEC decision date set for August 13, 2023. Meanwhile, other contenders, including BlackRock, are yet to receive a decision date for their 19b-4 applications.

Although ARK’s approval seems imminent, the saga for a Bitcoin ETF may not conclude just yet. The investment firm still needs to establish a surveillance sharing agreement with a crypto exchange. While Coinbase appears to be a strong candidate, it has already partnered with BlackRock to serve as a Bitcoin custodian if BlackRock’s ETF proposal is approved. Balchunas raised the question of whether BlackRock would allow Coinbase to form an agreement with another issuer, potentially giving ARK the edge.

BlackRock’s entry into the Bitcoin ETF race on June 16 has spurred similar initiatives among financial investment firms on Wall Street. Companies like Valkyrie, WisdomTree, and Invesco have recently re-filed their applications for spot Bitcoin ETFs, further intensifying the competition.

As the battle for the first Bitcoin ETF in the United States unfolds, ARK Invest’s strategic amendments and surveillance agreement have positioned them as frontrunners, but the outcome remains uncertain. Investors and industry participants eagerly await the SEC’s decision, which will shape the future of Bitcoin investment opportunities.

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