Cathie Wood Doubts SEC Will Approve Spot ETFs Beyond Bitcoin And Ether

ARK Invest CEO Cathie Wood believes the U.S. Securities and Exchange Commission’s (SEC) rubberstamp is limited to Bitcoin (BTC) and Ethereum (ETH) spot exchange-traded funds, while other crypto assets may face serious hurdles.

Only BTC, ETH May Get SEC Blessing

After the SEC’s greenlighting of spot Bitcoin ETFs in mid-January, market watchers have been speculating which alternative crypto tokens would follow next in the footsteps of BTC to secure approval for an exchange-traded fund.

Speaking in a recent interview with the Wall Street Journal’s Take on The Week podcast, Cathie Wood, the founder and CEO of ARK Investment Management, stated that the SEC is unlikely to give the legal blessing to spot products for any other crypto besides Bitcoin and ether.

“We’d be surprised to see anything but Bitcoin and Ether being approved by the SEC,” Wood posited.

Her comments echo the sentiments of pundits who have forecasted in the past that a fund like an XRP ETF is unlikely to hit the market anytime soon. Bloomberg analyst James Seyffart explained that spot XRP investment vehicles might not be introduced to the ETF market soon due to regulatory challenges. Moreover, Seyffart noted that XRP futures must first be traded on a regulated market like the Chicago Mercantile Exchange (CME) before the SEC can consider any filings.  

Last month, the regulator greenlighted 10 spot BTC ETFs, giving them the go-ahead to start trading in U.S. stock exchanges in a historic move. During his Squawk Box interview with CNBC on Feb. 14, SEC Chair Gary Gensler clarified that the spot BTC approval was neither an endorsement of the crypto asset itself nor a sign of how it might respond to ether in the future. The top Wall Street watchdog still has concerns about the crypto market, considering the majority of cryptocurrencies unregistered securities.

The SEC has so far delayed decisions on several ether ETF applications, including filings from Grayscale, Invesco Galaxy, Fidelity, and BlackRock, the world’s largest asset management firm. Other big-name companies vying for SEC’s approval include VanEck and Hashdex.

Will Spot Ether ETFs Get Approval Stamp In 2024?

The SEC is expected to give a decision on VanEck’s application by May 23, ARK 21Shares’ by May 24, Hashdex’s by May 30, Grayscale’s by June 18 and Invesco’s by July 5. The Commission must decide on Fidelity and BlackRock’s applications by Aug. 3 and Aug. 7, respectively.

Bloomberg’s James Seyffart believes the SEC will greenlight all outstanding spot Ethereum ETF filings simultaneously by May 23, 2024 — which is similar to how the regulator approved the nearly dozen spot Bitcoin groundbreaking offerings all at once. 

However, his colleague Eric Balchunas has recently lowered the probability of a spot ETH ETF approval this year from 70% to 60%, as per a Jan. 31 post on X (formerly known as Twitter):

“If Gensler really wants to — he can kick the can down the road. There was no more can-kicking for Bitcoin [ETF applications].”

If approved, spot ETH ETFs would give traditional investors exposure to the second-largest cryptocurrency without the hassle of buying and storing the assets themselves.