SEC’s Historical Approval Pattern Points to a Possible Bitcoin ETF Announcement Today

Cathie Wood’s ARK’s spot Bitcoin ETF is one of the many proposals put forward for the US Securities and Exchange Commission (SEC).

Dubbed ARK 21Shares, the product was developed in collaboration with Swiss firm 21Shares, which offers crypto exchange-traded products.

Ark21’s Deadline Raises Confidence in ETF Announcement Tonight

An update from QCP Capital indicates a high chance of an announcement tonight. This is based on the conclusion of ARK21’s deadline today as well as the SEC’s historical pattern of approving all ETFs simultaneously.

“The chances of an announcement tonight are high given Ark21’s deadline expires today and the SEC has historically approved all ETFs at once.”

The ARK 21Shares Bitcoin ETF filed Form 8-A with the SEC on January 4th to register its shares as securities listed on the Cboe BZX Exchange. The SEC’s upcoming meeting, scheduled for January 11, is the day following the deadline for approving or denying Ark and 21Shares’ proposal.

The securities regulator has not approved a spot Bitcoin ETF to be listed on a US exchange despite numerous pending applications. Last January, the SEC rejected the proposal to list the ARK 21Shares Bitcoin ETF on Cboe BZX, citing insufficient measures in the application to prevent fraudulent and manipulative acts.

In August 2023, Grayscale Investments secured a win against the SEC from US Court of Appeals Circuit Judge Neomi Rao to reconsider its spot Bitcoin ETF application, leading to the reversal of the commission’s decision to deny the GBTC listing application.

This move prompted a comprehensive review of all pending spot Bitcoin ETF applications. If ARK 21Shares’ application receives approval, the spot Bitcoin ETF will be listed with a fee of 0.21%, indicating a reduction of four basis points from the originally proposed number on Tuesday.

This comes after Ark Investment Management LLC reduced fees, intensifying the competition among issuers aiming to enhance the appeal of their products to investors in anticipation of a regulator’s decision on their fate.

Seriatim Vote on Bitcoin ETF Applications

While SEC meetings, whether open or closed, are publicly disclosed, Chair Gary Gensler might choose a seriatim vote for Bitcoin ETF applications. This approach enables collecting votes without publicly convening a meeting.

The SEC explains the process as,

“Matters are often voted “by seriatim,” which means that these matters are being circulated to each Commissioner’s office in turn, Commissioner-by-Commissioner, for his or her vote. The Chair typically votes last, but given that the Chair decides whether to circulate a seriatim in the first instance, it is reasonable to assume the Chair will approve it.”

The agency has occasionally refrained from voting on crypto ETFs, opting instead to delegate authority to staff, a process designed by the SEC to conserve Commission resources. SEC Commissioner Hester Peirce had previously mentioned that many initial denials of Bitcoin exchange-traded products were issued by the staff under authority delegated from the Commission.