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(Bloomberg) — Crypto exchange-traded-products issuer 21Shares, in partnership with Cathie Wood’s ARK Investment Management, refiled an application for a spot-Bitcoin ETF, arguing that such a fund would offer US investors protections that currently don’t exist.
The issuer is reviving a prior filing for the ARK 21Shares Bitcoin ETF, which would trade under the ticker ARKB and which would track Bitcoin’s price as measured by the S&P Bitcoin Index. The application comes amid entrenched resistance from US regulators against such funds. 21Shares initially filed for the product in 2021 and again last May, with both attempts among dozens of applications rejected by the US Securities and Exchange Commission.
“American investors have been hurt by crypto scams that are primarily international — and especially because there aren’t available, easy, regulated options at home,” Hany Rashwan, chief executive officer and co-founder of 21Shares, said in an interview. “We are very excited about the future of crypto as a firm and we think the United States is going to play a very big part of it.”
Wood, who is known for her ARK Innovation suite of ETFs in the US, has been working with 21Shares since before that initial filing as its independent board member.
Last year saw the implosion of a number of high-profile crypto firms, as well as the wipe-out of billions of dollars of investor money. Crypto exchange FTX infamously blew up at the end of 2022, with the fallout reverberating across the industry for months afterward. Regulators have in the past cited fraud and manipulation among the reasons for rejecting ETF applications.
Rashwan added that crypto products will continue to be popular among Americans, but that access “needs to be done in a regulatory friendly way, it needs to be done in a safe and accessible way. And at the moment, the absence of a spot Bitcoin ETF in America takes away significant investor protections.” Many traders, instead of finding access in US markets, might be looking abroad for other options.
21Shares is reviving the debate about the viability of a spot-Bitcoin ETF in the US, something regulators have in the past been hesitant to green-light. Issuers have for years been attempting to get such a product to the market.
Read more:
Bitcoin’s 70% Surge Fuels ETF Showdown Between Bulls and Bears
Bitcoin’s Resurgence Spurs Fresh Push to Launch Leveraged ETFs
The filing lands at a time when cryptocurrencies have been rallying as risk assets more broadly recover from a bad 2022 and as some investors argue that digital tokens can act as a place to park money in lieu of having it with traditional banks — though the upsurge is happening as regulators in the US and elsewhere are starting to pay closer attention to the digital-assets industry.
Bitcoin, the largest cryptocurrency, is up roughly 65% this year to trade around $27,000, up from $16,600 at the start of the year. Other tokens have also advanced.
Elsewhere, Grayscale Investments is looking to convert its Bitcoin trust into an ETF. The company has sued the SEC as part of its efforts to do so, with market-watchers saying recently that its chances of conversion have gone up following oral arguments in the case.
And in this environment, a handful of issuers have also submitted applications for leveraged Bitcoin products, trying their hand at getting approval for a structure the SEC has never previously approved.
Rashwan of 21Shares says that his company’s unique angle is “investor protection through and through.”
“We have seen greater demand from American investors for American-built products, especially over the past few months with bank failures and especially over the last year with international crypto blowups,” he said. “That’s why we’re excited about pushing crypto in a regulatory friendly way.”
–With assistance from Sam Potter.
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