Ark Invest CEO Cathie Wood said that the U.S. Securities and Exchange Commission (SEC) has improved its "depth of knowledge" and understanding of the issues surrounding Bitcoin and that a spot Bitcoin exchange-traded fund (ETF) will likely be approved by Jan. 10, 2024.
Speaking at an interview with CNBC on Tuesday, Wood said that she was "very encouraged" by the recent comments from SEC Chairman Gary Gensler, who expressed interest in regulating the crypto industry and creating a clear framework for innovation.
"We're watching the plumbing and the plumbing works," Wood said, praising 21Shares as "the largest pure-play ETP crypto provider in the world with roughly $2 billion in assets."
Bitcoin, a Hedge with Growing Demand
Wood also said that Bitcoin is a hedge against both inflation and deflation, as it has a fixed supply of 21 million coins and a growing demand from institutional and retail investors. She predicted that within five years, Bitcoin will be treated like an investment in physical gold, which has a market capitalization of about $11 trillion.
Bitcoin, the largest cryptocurrency by market value, has surged more than 300% in the past year, reaching a record high of over $64,000 in April. However, it has also faced volatility and regulatory uncertainty, as well as environmental concerns over its energy consumption. Bitcoin was trading at around $40,000 as of 12:00 p.m. New York time on Wednesday.
A Change of Stance Likely from The SEC
A spot Bitcoin ETF would allow investors to gain exposure to the actual price of Bitcoin, rather than futures contracts or other derivatives. Several firms, including Ark Invest, have filed applications for such a product, but the SEC has yet to approve any of them. The SEC has repeatedly delayed or rejected Bitcoin ETF proposals in the past, citing risks of fraud and market manipulation.
Wood said that she is optimistic that the SEC will change its stance, as it has become more familiar with the technology and the benefits of crypto assets. She also said that she expects more innovation and adoption in the crypto space, especially in areas such as decentralized finance (DeFi), non-fungible tokens (NFTs), and stablecoins.
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