The US Securities and Exchange Commission (SEC) remains firm in its position regarding the approval of a Bitcoin spot exchange-traded fund (ETF). Cathie Wood, founder of Ark Invest, believes she has identified a key reason behind this stance. In an interview on CNBC’s Squawk Box, Wood, a veteran investor and head of one of the largest US asset management firms, suggested that the SEC chairman’s political aspirations may be hindering the approval process.
Wood speculates that Gary Gensler, the SEC chairman, has ambitions of becoming the Treasury Secretary. Given this, the introduction of a Bitcoin spot ETF could complicate his goals. Gensler, who previously served as a professor of crypto and blockchain at Massachusetts Institute of Technology (MIT), has a deep understanding of the industry. However, despite his knowledge, Wood questions his refusal to approve a Bitcoin spot ETF during his tenure.
Gensler has cited concerns about market manipulation as one of the reasons for the SEC’s hesitation. Wood, on the other hand, disagrees. She argues that Bitcoin operates on a decentralized and transparent network, where all transactions can be easily traced. This makes it highly unlikely that successful market manipulation can occur. Cryptocurrencies like Bitcoin, built on distributed ledger technology (DLT), are known for their public visibility and immutability, making it difficult to modify transactions once they are approved by a network of miners.
Ark Invest, as a firm, has been a strong advocate for introducing crypto native services into mainstream financial markets. The company has even filed its own interest for a Bitcoin spot ETF with the SEC, hoping for approval. BlackRock, an $11 trillion asset management firm, has also joined the pursuit and is increasingly optimistic about the approval of a Bitcoin spot ETF by January 2024. Other major players, including Fidelity, Grayscale, and WisdomTree, are also seeking approval from the SEC.
The Potential Impact of Bitcoin Spot ETF Approval
Wood believes that the growing interest in a Bitcoin spot ETF among these prominent firms could have a significant impact on the price of Bitcoin and the broader crypto market. She predicts that approval of a Bitcoin spot ETF would attract liquidity from mainstream investors who have been hesitant to participate due to regulatory uncertainty.
“The crypto market has the potential to exceed its current $1 trillion market valuation and reach $25 trillion by 2030,” says Cathie Wood, expressing her long-term projections. She sees the approval of a Bitcoin spot ETF as a catalyst that could unlock the investment potential of digital assets, ultimately driving the market towards this ambitious valuation.
