In a recent interview with Bloomberg, Cathie Wood, the CEO and CIO of Ark Invest, shared some insights on the potential impact of Bitcoin ETFs on the market. Wood stated the announcement from BlackRock regarding its filing for a spot Bitcoin ETF in June had caused the price to move upward but has been steady since. She said it was quite remarkable that the Bitcoin price went from $19,000 to $30,000 during a regional banking crisis.
According to Wood, Bitcoin is attractive because of its ability to protect against inflation and asset confiscation, as well as its resilience to counterparty risk. This is why Bitcoin saw an inflow due to its decentralized and transparent characteristics, providing a safe haven among mounting counterparty anxieties.
Looking ahead, Wood projects that the impending date of August 13th will likely pass with the SEC possibly delaying the approval of Ark’s Bitcoin ETF. She believes that if the SEC authorises a spot Bitcoin ETF, it would likely approve many at once, emphasizing the need for excellent marketing and communication tactics in separating them. Ark Invest, for its part, has been releasing monthly Bitcoin insights, as well as initiating Bitcoin brainstorming sessions to emphasize its research depth and commitment. Wood said the firm was the first asset manager to gain exposure to Bitcoin in 2015.
Is the SEC shifting its stance?
Wood pointed out that the SEC has lost some recent court cases challenging its regulation efforts. She said that even though SEC chair Gary Gensler claims that 5 commissioners vote, “one assumes that the way that Gary votes is the way the SEC will vote” since 2 commissioners are each Republican and Democrats. His comments could highlight Gensler distancing himself a little from crypto enforcement actions, which may ultimately benefit the industry.
However, Wood criticized the contradicting approach by the SEC and questioned the decision-making around the approval of a Bitcoin futures ETF while remaining opposed to a spot Bitcoin ETF. She finds it perplexing how the former, which involves counterparty risk, gained approval while the latter, backed one-to-one by Bitcoin in cold storage, did not.
She said, “There’s counterparty risk there that you would not have with a Bitcoin ETF, which is backed one-to-one with Bitcoin in Coinbase’s cold storage, it still confounds me.”
Ultimately, the SEC approving a spot Bitcoin ETF may have stopped people investing in FTX, which is now in all sorts of legal trouble.