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Cathie Wood Doubts SEC Approval for Crypto ETFs Beyond Bitcoin and Ethereum

Summary:
Cathie Wood, founder of ARK Investment Management, has expressed skepticism regarding the Securities and Exchange Commission’s (SEC) stance on approving spot exchange-traded funds (ETFs) following cryptocurrencies beyond Bitcoin and Ethereum. Wood’s sentiment was echoed in her recent remarks on WSJ’s Take On the Week podcast: “We’d be surprised to see anything but Bitcoin and Ether being approved by the SEC.” Franklin Templeton Joins the ETF Race This sentiment follows Franklin Templeton’s recent filing with the SEC for approval to launch a spot Ethereum ETF. If approved, the filing, submitted on February 12, would be listed as the “Franklin Ethereum ETF” on the Chicago Board Options Exchange. The filing states that Franklin Templeton plans to stake a portion of the ETF’s

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Cathie Wood, founder of ARK Investment Management, has expressed skepticism regarding the Securities and Exchange Commission’s (SEC) stance on approving spot exchange-traded funds (ETFs) following cryptocurrencies beyond Bitcoin and Ethereum.

Wood’s sentiment was echoed in her recent remarks on WSJ’s Take On the Week podcast: “We’d be surprised to see anything but Bitcoin and Ether being approved by the SEC.”

Franklin Templeton Joins the ETF Race

This sentiment follows Franklin Templeton’s recent filing with the SEC for approval to launch a spot Ethereum ETF. If approved, the filing, submitted on February 12, would be listed as the “Franklin Ethereum ETF” on the Chicago Board Options Exchange.

The filing states that Franklin Templeton plans to stake a portion of the ETF’s Ether for additional income, similar to strategies outlined in ARK 21Shares’ recent applications.

“The Sponsor may, from time to time, stake a portion of the Fund’s assets through one or more trusted staking providers, which may include an affiliate of the Sponsor.” the filing stated.

The asset manager with $1.5 trillion in AUM joins several prominent asset management firms, including BlackRock, VanEck, Fidelity, Invesco Galaxy, Grayscale, and Hashdex, who have also submitted applications for spot Ethereum ETFs.

Franklin Templeton’s Bitcoin ETF Struggles Amidst Competitors

On January 11, 2024, these eight firms, including Franklin Templeton, introduced spot Bitcoin ETFs. However, Franklin Templeton’s spot Bitcoin ETF has been less successful compared to others, gathering only $77 million by February 9.

The iShares Bitcoin Trust (IBIT) from asset management firm BlackRock and Fidelity’s Wise Origin Bitcoin Fund (FBTC) have experienced the highest investor interest, with IBIT acquiring more than $3.5 billion worth of Bitcoin over the last month, while Fidelity has observed an influx of approximately $3 billion.

Meanwhile, the SEC has postponed all decisions regarding approving a spot Ethereum ETF up to this point. The U.S. SEC postponed its ruling on an application submitted by Grayscale Investments seeking to transform its Ethereum trust offering into a spot ETF.

It also delayed BlackRock’s proposal to introduce a similar product with VanEck’s application for a spot Ethereum ETF, pending approval or denial by May 23. JP Morgan assesses the likelihood of such a fund receiving approval before May at below 50%.

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