KEY POINTS
- ARK, like BlackRock, was reluctant to include cash creations
- ARK 21Shares amended its S-1 registration on Monday
- Bitcoin was trading in the green zone at $43,074.76 in the early hours of Tuesday
With the final deadline for spot Bitcoin exchange-traded fund (ETF) applications just a few weeks away, ARK Invest and 21Shares have become the latest to amend their filing to include cash creation and redemptions model.
ARK 21Shares' Bitcoin ETF proposal initially preferred the in-kind creation and redemptions model. Despite reports that the U.S. Securities and Exchange Commission had instructed hopeful issuers to amend their registrations, they did not budge and continued with their preferred model.
But on Monday, ARK 21Shares amended their S-1 registration, saying the Bitcoin ETF will use a cash creation and redemption model as per the SEC's demand.
Senior Bloomberg Intelligence ETF analyst Eric Balchunas sees ARK's latest move as a strategic one to make it to the first group of approved applicants.
"ARK bends the knee, joins the cash creations club in order to make it to the starting gate. BlackRock probably next," Balchunas said.
ARK, like BlackRock, was reluctant to include cash creations and had proposed various ways to do in-kind creations and redemptions.
However, the efforts were in vain. The latest move suggests that the SEC did not budge on its preferred creations and redemptions model.
"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 [sic] we at 11th hour, holidays about to hit," the ETF analyst tweeted.
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
According to finance lawyer Scott Johnsson, the development in ARK's spot Bitcoin ETF filing could mean all issuers, particularly those who previously said would use the in-kind creation and redemptions model, will now amend their filings and will use the cash model instead.
"1 of the 2 I was looking out for. Think this does it, all cash create it seems," Johnsson said.
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
Bitcoin has slowly climbed back to a higher price level. It was trading in the green zone at $43,074.76 as of 4:14 a.m. ET on Tuesday, with a 24-hour trading volume up by 36.37% at $25.81 million. The latest price action represents a 4.77% increase in its value in the past 24 hours and a 2.95% gain over the last seven days.
Data from CoinMarketCap shows Bitcoin's currency circulating supply stands at 19.57 million and its market cap is at $843.26 billion.
