A recent amendment to the joint spot Bitcoin (BTC) exchange-traded fund (ETF) application by ARK Invest and 21Shares is seen as a promising signal of potential approval. This revised filing, submitted to the U.S. Securities and Exchange Commission on October 11, provides additional details about the proposed spot Bitcoin ETF, especially regarding asset custody and valuation methods.
Eric Balchunas, a senior ETF analyst at Bloomberg, suggests that these changes are a response to concerns raised by the SEC, which ETF issuers are expected to address. He sees this as a positive sign, indicating significant progress in the approval process. Balchunas believes these amendments were scattered throughout the document, adding five pages to its length, without introducing any new or insurmountable issues.
One of the key changes noted in the revised filing is ARK's acknowledgment that the fund's net asset value (NAV) calculation doesn't align with generally accepted accounting principles (GAAP), the standard recognized by the SEC. Furthermore, the updated document clarifies that ETF assets held by Coinbase Custody are maintained in separate accounts, preventing commingling with corporate or other client assets.
James Seyffart, an ETF analyst at Bloomberg, emphasizes that these developments are favorable for future approval prospects. Scott Johnsson, a general partner at Buren Capital, highlights another addition in the amended filing, which suggests that if BTC sees increased use for illicit activities or if the environmental consequences of Bitcoin mining lead to restrictions, the ETF's value might benefit. Johnsson observes that the SEC does not appear to be creating unnecessary obstacles through its review of the disclosure.
