Aug 11, 2023

The U.S. Securities and Exchange Commission (SEC) extended its review of the Ark 21Shares bitcoin exchange-traded fund (ETF) application, as it continues to look at over a dozen applications from traditional finance heavyweights like BlackRock and Fidelity.

Video transcript

The SEC is not really keeping it going. It's just pausing and delaying that they've extended their review of the Arc 21 shares, Bitcoin ETF application as it continues to look at spot Bitcoin ETF applications from Trad heavyweights like Black Rock and Fidelity Arc Investment management and 21 shares have been looking for an EF approval since 2021. You believe it all those years ago. Now when it made its first ETF application which was followed by another one earlier this year. Will I'm gonna kick this one off to you? I think there was a lot of chatter about a potential ETF uh application approval. There is still a chance that we get an ETF app approval but these extensions keep coming. What do you make of this? Same story? Different year, different dates, same story. Yeah, it just keeps happening. I mean there's a lot of ETS out there for Bitcoin right now and there's like the one with Galaxy Digital, there's the Black Rock one which really kind of got the ball rolling again. And then we have this 21 chairs, one which has been outstanding for quite a while you could name like three or four others. Right. So what are they going after? Well, they're going after this retail crowd that has brokerage exchanges. You can like log into Schwab or log into fidelity and then they can go purchase Bitcoin through an ETF product. And that would really open up the doors of adoption and be a quite lucrative business for a lot of people who are in the ETF game because they get a little bit of the bits for every time you buy and sell one of these things, which is really nice. Why is the sec continuing to delay this? Well, the rationale a few years ago was market manipulation is pretty rampant within crypto and that a lot of the numbers were fake, right? So think of like trading volumes, there's a lot of wash trading within crypto and then even like the more reputable exchanges out there, like the coin base is the world. Well, I mean, they're getting sued and we don't really know if we like these markets and also coin base is interacting with the larger crypto market. Will that kind of makes the numbers on Coinbase a little suspect. So there's a lot of thoughts around like why this can't happen. But I think with blackrock piling in and with a bunch of other people re epping their ETF there's this idea that maybe now is the time, maybe now we have enough information about these markets the key thing with the recent filings, of course was the surveillance agreement where there was an agreement between the ETF and the exchanges and the NASDAQ to be able to look at all the numbers and look under the decks and see like if there was market manipulation in any sort of way and that the thought was like, maybe that will get it across the finish line and a lot of people have uh put good numbers on those bets Zach. Yeah, I hate to be like the political conspiracy guy, but this does kind of feel like an entirely political calculation at this point. Right. So Sec chair, Gary Gensler has long been against a lot of these vehicles and long been for uh alleged consumer protection. And I think there's been a lot of uh speculation in the space that maybe this is the avenue in which Gary sort of yields a little bit. Right. He's going real hard on all these unregistered securities issuers. He's going real hard on all the crypto exchanges. Maybe we'll throw the most trad Wall Street friendly product. A Bitcoin spot ETF that's probably the most friendly of the bunch. Maybe we'll give that one our blessing, right? And maybe sort of it'll change sort of the overall political, political calculus and perception of Gary Gentzler view on crypto. And I think these delays and these subsequent delays just add a lot of fuel to that fire, right? Uh Add a lot of suspicion that this is indeed a political calculation as to when it will be most useful timing wise to maybe finally say, OK, we have a Bitcoin futures ETF, let's do a spot. Bitcoin ETF. Ultimately, when it comes down to it, it's still based on the same markets. Let's just get this thing over with. Right. So I, I don't know it like the behind the scene stuff, the political calculation stuff kind of feels like the story at this point. I don't know. We're gonna have to ask those like Bloomberg ETF guys like what their odds are now because they were all like 60 40. Yes and like whatever, who knows, it's all procedural but will, what do you think? I wanna add one quote which was in the coin desk Hard Coal. This is from Scott, whose legal counsel and consumer advocacy group Better Market saying quote, the spot Bitcoin markets have won a history of artificially inflated trading volumes due to rampant manipulation and los trading. And two are highly concentrated and three rely on a select group of individuals and entities to maintain Bitcoin's network. Now. One in two kind of seem similar to the things we've seen in the past, like an echoing of all the thoughts that Gary Ginzler and others have had against it. The third one is a little interesting kind of talking about like how Bitcoin works and maybe there's something along those lines that people are still just like trying to learn about. But in whole Zach, like I, I kind of view the comment from uh scar Fran here as like being incorrect. Like I think what you're saying makes a little bit more sense. It does seem like there's a lot of political agitation or political angling here that's not working out for us. Bit Coiners, Jen. Yeah, I remember when the SCC responded to Black Rock and the subsequent applications. And I said, and I think Zach, you agreed with me that at least they're responding and they're saying, you know, what maybe needs to be fixed and, and what we should focus on here. And then everyone came out with the surveillance sharing agreement with coin base and now we are delayed. It just feels like deja vu almost every story we talk about. It's like push and pull and push and pull and we're stuck in this um in between, but I do remain bullish just by the fact that Black Rock has um thrown their hat into the race here. I want to point out uh matrix report or matrix port article that was on coin desk this morning that said they believe that when there is an ETF approval, there will be a flurry of subsequent approvals afterwards that will kind of get us out of this holding pattern that we've seen in the Bitcoin market. And I also have to remain bullish on this whole ETF saga. Because we already have one in Canada. And I just wish, I wish the best and I hope that you too in the US can experience all of the glory of the north, the glory that they need. The glory of the north.

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