Bitcoin ETF applicants gear up to lead rivals ahead of potential approval

12/01/2023 19:00:00 GMT|ByLockridge Okoth

Grayscale has hired John Hoffman, a former Invesco ETF executive, to launch the fund if approved.
Ark Invest is planning to pour $130 million in cash into its spot BTC ETF fund for competitive advantage.
The moves suggest increasing confidence that a Bitcoin ETF will be approved.

Amid ongoing spot Bitcoin exchange-traded funds (ETFs) race, applicants continue to engage with the US Securities & Exchange Commission (SEC) to identify the best opportunity fit for approval. On one hand, the firms are progressively revising their applications to satisfy the financial regulator’s expectations. On the other hand, they are working to position themselves well in the race once approvals arrive.

Also Read: Spot Bitcoin ETF window set between January 5 and 10, expert says as SEC publishes proposed rule changes

Grayscale hires John Hoffman ahead of spot BTC approval

Grayscale has hired John Hoffman to “lead the investment firm’s distribution and fight in what is going to be an epic marketing war,” said Bloomberg’s Eric Balchunas in reference to the anticipated spot BTC ETF approval.

PEOPLE MOVES: Grayscale has hired John Hoffman, the former head of Invesco's US ETF biz and industry veteran, to help lead distribution and fight in what is going to be an epic marketing war... h/t @martypartymusic pic.twitter.com/9aB1J9h1YO
— Eric Balchunas (@EricBalchunas) December 1, 2023

Hoffman brings in a wealth of experience in leadership and management on the product distribution and investment front, according to his LinkedIn page, which notes a tenure of over six years with Invesco. Transitioning to Grayscale, Hoffman comes in as managing director, head of distributions and partnerships.

Ark Invest has $130 million in cash ready

Elsewhere, Ark Invest could be preparing to pour up to $130 million into its spot BTC ETF product, also ahead of a possible launch, with reports that the firm is selling its Grayscale Bitcoin Trust (GBTC) stake so that it can focus on its own ETF for exposure. According to ETF specialists Balchunas and colleague James Seyffart, “the potential bump in volume and flows might provide an early edge over market rivals such as BlackRock.”

ARK/21Shares has ace up sleeve in the Bitcoin ETF Derby as it likely to move $130m out of $GBTC and into $ARKB. Early BYOA is equiv to a starter log- doesn't guarantee a big fire but it helps, and they'll need it going against likes of BLK, Fidelity. New from me and @JSeyff pic.twitter.com/fIMgxFVYQO
— Eric Balchunas (@EricBalchunas) November 30, 2023

The capital influx is much-needed given the heft of the rest of the players in the market. According to Balchunas and Seyffart, “BlackRock’s ETF business is 184X the size of Ark’s”. The ETF specialists indicate that BlackRock’s offering is already a popular choice in the spot BTC race.

With the capital influx, the Ark 21 Shares Bitcoin ETF, whose ticker will be “ARKB”, could jump out to an early lead in the upcoming spot BTC ETF race. Since the $130 million would come in chunks, it could help in the product’s marketing by giving the impression that it was attracting consistent interest.

Overall, the fact that the firms are progressively revising their applications with the SEC points to a public effort to refine their offerings. Behind closed doors, they are also building muscle for competitive edge once the products go live. Evidence of this is the profile of recruits at Grayscale and the GBTC stake sales at Cathie Wood’s Ark Invest. It all points to increased confidence in approvals.

Meanwhile, Seyffart said the window for approval ranges from January 5th to 10th.

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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