Ark Invest, 21Shares bend the knee to SEC’s cash creates edict to allow cash creations and redemptions
|- ARK Invest has bent the knee, joining the cash creations club in order to make it to the starting gate.
- It joins Valkyrie, Fidelity Investments, and Invesco, with an ETF specialist anticipating BlackRock joining the list.
- Meanwhile, the SEC has gone for early delays for the Hashdex and Grayscale Ethereum ETF filings, missing their December 18 deadlines.
Ark Invest and 21Shares, two firms associated with Cathie Wood, have capitulated to the US Securities and Exchange Commission (SEC), which according to specialists, may be insisting, “cash creates or you will wait.”
Ark Invest and 21Shares to do cash redemptions
Ark Invest and 21Shares have joined the “cash creations club,” according to Eric Balchunas and James Seyffart, exchange-traded funds (ETF) specialists with Bloomberg Intelligence.
ARK bends the knee, joins the Cash Creations Club in order to make it to the starting gate. BlackRock probably next.. https://t.co/z3clix3qHb
— Eric Balchunas (@EricBalchunas) December 18, 2023
ARK bends the knee, joins the Cash Creations Club in order to make it to the starting gate. BlackRock probably next.. https://t.co/z3clix3qHb
— Eric Balchunas (@EricBalchunas) December 18, 2023
The report comes after the firms’ S-1 amendment for a spot Bitcoin ETF, with Seyffart indicating, “Looks like they are accepting the SEC's edict of only allowing cash creations and redemptions (at least to start).”
Ark 21Shares S-1 amendment excerpt
With the two firms joining the list, finance lawyer Scott Johnson believes it will be all cash creates for the remaining players.
1 of the 2 I was looking out for. Think this does it, all cash create it seems. https://t.co/W32vnGu2SO
— Scott Johnsson (@SGJohnsson) December 18, 2023
1 of the 2 I was looking out for. Think this does it, all cash create it seems. https://t.co/W32vnGu2SO
— Scott Johnsson (@SGJohnsson) December 18, 2023
BlackRock caves in as WisdomTree files fourth amendment
Recent developments also indicate that BlackRock has also caved in, submitting its S-1 amendment with an excerpt stating, “These transactions will take place in exchange for cash. Subject to the in-kind Regulatory Approval, these transactions may also take place in exchange for bitcoin.”
bye bye in-kind https://t.co/uJX9ll62WO
— Lyle Pratt (@lylepratt) December 18, 2023
bye bye in-kind https://t.co/uJX9ll62WO
— Lyle Pratt (@lylepratt) December 18, 2023
Elsewhere, WisdomTree, another institutional player, has also filed the fourth amendment to its spot BTC ETF application.
@JSeyff also WisdomTree filled a new version of its application. https://t.co/fP5SDW3uDF
— Alessandro Ottaviani (@AlexOttaBTC) December 18, 2023
@JSeyff also WisdomTree filled a new version of its application. https://t.co/fP5SDW3uDF
— Alessandro Ottaviani (@AlexOttaBTC) December 18, 2023
SEC is not budging, Eric Balchunas
With the list of institutions bending the knee to the SEC’s decree for cash creates, Balchunas opines that “the SEC is not budging,” adding, “[this] is probably good if you looking for January approval because we at 11th hour, holidays about to hit.”
His statement comes from a place of certainty that Ark Invest and 21Shares never wanted to do cash creations, so much so that they had even worked out an alternative way to do in-kind creations.
Amid the back and forth between cash creates (cash redemptions) and in-kind creates (crypto redemptions, the financial regulator has delayed Hashdex and Grayscale Ether ETFs which were due on December 18.
I know for fact ARK/21Shares did NOT want to do cash creations, even worked out a creative alt way to do in-kind.. so if they surrendering that tells you SEC not budging, debate is over, which is prob good if you looking for Jan approval bc we at 11th hour, holidays about to hit
— Eric Balchunas (@EricBalchunas) December 18, 2023
I know for fact ARK/21Shares did NOT want to do cash creations, even worked out a creative alt way to do in-kind.. so if they surrendering that tells you SEC not budging, debate is over, which is prob good if you looking for Jan approval bc we at 11th hour, holidays about to hit
— Eric Balchunas (@EricBalchunas) December 18, 2023
Difference between cash creates and in-kind creates here.
Crypto ETF FAQs
What is an ETF?
An Exchange-Traded Fund (ETF) is an investment vehicle or an index that tracks the price of an underlying asset. ETFs can not only track a single asset, but a group of assets and sectors. For example, a Bitcoin ETF tracks Bitcoin’s price. ETF is a tool used by investors to gain exposure to a certain asset.
Is Bitcoin futures ETF approved?
Yes. The first Bitcoin futures ETF in the US was approved by the US Securities & Exchange Commission in October 2021. A total of seven Bitcoin futures ETFs have been approved, with more than 20 still waiting for the regulator’s permission. The SEC says that the cryptocurrency industry is new and subject to manipulation, which is why it has been delaying crypto-related futures ETFs for the last few years.
Is Bitcoin spot ETF approved?
Bitcoin spot ETF has been approved outside the US, but the SEC is yet to approve one in the country. After BlackRock filed for a Bitcoin spot ETF on June 15, the interest surrounding crypto ETFs has been renewed. Grayscale – whose application for a Bitcoin spot ETF was initially rejected by the SEC – got a victory in court, forcing the US regulator to review its proposal again. The SEC’s loss in this lawsuit has fueled hopes that a Bitcoin spot ETF might be approved by the end of the year.
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