Battle For Bitcoin ETF Dominance: Ark Invest and BlackRock Locked In Showdown

Key Points:

• Ark Invest and BlackRock are incorporating surveillance-sharing in their Bitcoin ETF proposals to deter fraud and market manipulation.
• The agreements involve sharing information on trading activity, clearing, and client identity.
• Both companies are vying for the first approval of a spot Bitcoin ETF, but the SEC’s historical concerns about fraud and manipulation cast uncertainty on the decision’s timing and outcome.

Cathie Wood’s Ark Invest has agreed to incorporate a surveillance-sharing agreement in its proposal for a spot bitcoin (BTC) exchange-traded fund (ETF) similar to BlackRock.

According to ARK’s revised 19b-4 filing, the deal would be between the Cboe BZX Exchange, where the ETF would be listed, and a U.S.-based spot Bitcoin trading platform.

The new petition, in particular, contains a surveillance-sharing agreement to discourage fraud and market manipulation. Surveillance-sharing agreements include the exchange of information on market trading activity, clearing activity, and client identity in order to defend against market manipulation.

“The Exchange is proposing to take additional steps to those described above to supplement its ability to obtain information that would be helpful in detecting, investigating, and deterring fraud and market manipulation in the Commodity-Based Trust Shares,” Cboe BZX stated in an amended filing.

With Ark CEO Cathie Wood’s stakes in Coinbase shares, many speculated that the acquisition would include Coinbase. Cathie Wood’s Ark Invest just acquired $21 million in Coinbase shares to their portfolio on June 7, 2023.

As a result, if the Ark Bitcoin ETF also intends to employ Coinbase services, there may be a conflict of interest from a partnership standpoint. In any case, this might be a pleasant issue for the US-based crypto exchange.

The application might place ARK in competition with BlackRock for the first approval of a spot bitcoin ETF, given the fund’s first submission occurred months before BlackRock’s. The inclusion of the agreement in BlackRock’s application was seen as a possible breakthrough for the listing of a spot Bitcoin ETF in the United States; nonetheless, the SEC has never authorized one previously, citing worries about fraud and manipulation over the years.

Wood is one of the Bitcoin advocates who believes the top cryptocurrency will hit the $1 million mark by 2023. Nevertheless, Bloomberg ETF expert Eric Balchunas wonders whether the Ark ETF decision will be postponed and the Blackrock file will be granted.

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Harold

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