The anticipation surrounding the possible approval of spot Bitcoin Exchange-Traded Funds (ETFs) might temporarily affect Bitcoin’s price negatively, suggests Cathie Wood, the CEO of ARK Invest.
In a recent interview with Yahoo Finance on December 26, Wood, who is also the founder and chief investment officer of ARK, expressed her belief that the approval of a spot Bitcoin ETF in the U.S. might lead to a “sell on the news” scenario. This term refers to investors selling their holdings following the realization of a highly anticipated event, in this case, the approval of a spot Bitcoin ETF. Wood anticipates that investors, having already seen substantial gains due to the expectation of this approval, might seize the opportunity to cash in on their profits.
However, Wood emphasized that any such short-term market movements should be viewed in the context of the longer-term outlook, which she believes is more significant. She is optimistic about the U.S. Securities and Exchange Commission (SEC) eventually greenlighting a spot Bitcoin ETF, particularly for institutional investors.
Wood argues that the approval of a spot Bitcoin ETF would simplify the process for institutions to invest in Bitcoin, potentially leading them to allocate a small fraction of their trillions of dollars in assets to Bitcoin. Given Bitcoin’s limited supply of 21 million coins, even a minimal percentage allocation from institutional investors could have a substantial impact on its price.
ARK Invest, under Wood’s leadership, is among the 14 entities that have applied for a spot Bitcoin ETF with the SEC. The ARK 21Shares Bitcoin ETF, developed in partnership with 21Shares, a European crypto exchange-traded product provider, is ARK’s offering in this space.
Wood shared that recent discussions with the SEC regarding the spot Bitcoin ETF have been encouraging, adding to the optimism about the potential approval of the first spot Bitcoin ETFs by January 10. She noted a shift in the SEC’s approach over the past month to six weeks, moving from silent denials to engaging in more detailed and technical inquiries.
This change, according to Wood, is a positive development, leading to productive conversations with the SEC. She concluded with a positive outlook, expressing confidence in the likelihood of a spot Bitcoin ETF approval in January.
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