17. Mai 2021

American Bitcoin ETF more likely due to change of government

Ark Invest: „American Bitcoin ETF more likely due to change of government“.

Cathie Wood believes the chances of a bitcoin ETF in the US have increased with the election of Joe Biden.

Cathie Wood, founder of asset management firm Ark Investment Management, is convinced that the approval of a first American bitcoin index fund (ETF) has become much more likely due to the change of administration from Trump to Biden, as it also brings with it a change of leadership at the US Securities and Exchange Commission (SEC), which is responsible for the matter.

In an interview with the CNBC television channel the day before yesterday, Wood accordingly gave the assessment that the „Securities and Exchange Commission“ could now be more open to a Bitcoin (BTC)-based index fund as a result. Under the previous leadership, the Bitcoin Future agency had repeatedly rejected and delayed applications, meaning that no bitcoin ETF has yet been approved in the US.

The head of Ark Invest is confident about this, mainly because of the appointment of Gary Gensler as the new chairman of the SEC. Gensler is known to have a good understanding of the technological concept of digital currencies and Bitcoin.

It also welcomes the fact that Valeria Szczepanik, the head of the SEC’s Division of Innovation and Financial Technology, will now report directly to the new chairman. The head of innovation is already dubbed the „crypto czarina“ in the crypto industry, as the post gives her great influence over the future regulation of cryptocurrencies, which is now likely to come into play even more directly.

„I think the likelihood of us getting a bitcoin ETF has increased,“ as Cathie Wood therefore hopes

To that effect, she elaborates, „Gensler understands the technology, he understands how cryptocurrency works. […] We now have people at the helm who actually understand the crypto industry.“

But even without an American ETF, Bitcoin is currently on a steady upward trajectory

Wood attributes this primarily to the increased interest of institutional investors, although she herself did not expect that some companies would so quickly „replace national currencies or cash on their books with Bitcoin on a large scale“. The examples of Square and Tesla would be followed by more and more companies over time. The payment service provider had purchased 4,709 BTC in October 2020, while the innovative carmaker invested in bitcoin for a whopping $1.5 billion earlier this month.

„If all companies in the US convert 10% of their assets into bitcoin, that alone would raise the exchange rate to US$200,000,“ as the investment expert calculates to that effect.

Similar to Ark, other investment firms also seem to see an opportunity in the change of government, because after Biden’s inauguration, several new applications for a Bitcoin ETF have already been received by the SEC. The New York Digital Investment Group, for example, filed a corresponding application yesterday, while Valkyrie Digital Assets already took this step on 22 January.

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