athie Wood, founder and CEO of investment firm ARK Invest, recently shared her thoughts on which cryptocurrency exchange-traded funds (ETFs) are most likely to gain approval from regulators. In an interview with the Wall Street Journal, Wood predicted the Securities and Exchange Commission (SEC) will probably only greenlight ETFs tracking Bitcoin (BTC) and Ethereum (ETH).
Regulator Views on Crypto Classification
Wood based this assessment on how top regulators like SEC Chair Gary Gensler have historically classified different cryptocurrencies. Gensler has generally referred to Bitcoin as a commodity, though his stance on Ethereum is less clear. Others in regulatory roles have also called Ethereum a commodity. As commodities are not considered securities, this implies the SEC may treat BTC and ETH similarly in terms of allowing crypto ETFs.
However, Wood acknowledged that past regulatory behavior does not guarantee broader approvals. Gensler has stressed that the recent approvals of Bitcoin ETF applications do not define the SEC's view on other crypto assets and related investment products. The agency still plans to assess each new filing on a case-by-case basis.
Ark Invest's Existing Crypto ETFs
Through partnerships with issuer 21Shares, ARK Invest currently offers several exchange-traded products providing exposure to Bitcoin and Ethereum. This includes the ARK 21Shares Bitcoin ETF, which became among the first crypto ETFs approved by the SEC to track spot BTC prices last January. ARK and 21Shares have also launched Ethereum futures strategy ETFs.
Most recently, ARK amended its application seeking a spot Ethereum ETF, likely to be decided on by regulators in May along with a similar proposal from VanEck. Beyond pursuing its own Ether fund, ARK's comments through Wood suggest the firm does not expect ETFs for other cryptocurrencies like XRP to gain SEC clearance in the near future.
Outlook for Wider Crypto ETF Acceptance
Whether the outlook proves accurate remains to be seen as applications for more diverse crypto ETFs make their way through the approval process. Nonetheless, Wood brings valuable regulatory insight as a top firm actively engaged with the SEC on these issues. If borne out, her view also implies that apart from Bitcoin and Ethereum, other cryptocurrencies may struggle to see affiliated ETF vehicles approved in the US until regulators adjust how they classify and oversee such digital assets.
