Crypto Quill

The Bitcoin ETF approval sparks a backlash from the crypto advocate

The Securities and Exchange Commission (SEC) has recently approved a number of exchange-traded funds (ETFs) that will directly hold Bitcoin, marking a significant shift in the agency’s stance on the cryptocurrency. However, not everyone is happy with this decision, especially one of the most prominent crypto supporters in the industry: Cathie Wood.

Wood, the founder and CEO of Ark Investment Management, a firm that focuses on disruptive innovation, expressed her disappointment and frustration with SEC Chair Gary Gensler’s statement shortly after the approval. She said that Gensler “denigrated” the whole crypto space and showed a lack of support for Bitcoin and other digital assets.

What did Gensler say?

Gensler issued a statement on Wednesday, January 11, 2024, after the SEC voted 3-2 to allow spot Bitcoin ETFs to begin trading. He said that while he approved the listing and trading of certain spot Bitcoin ETP shares, he did not approve or endorse Bitcoin. He also advised investors to remain cautious about the myriad risks associated with Bitcoin and products whose value is tied to crypto.

He wrote: “While we approved the listing and trading of certain spot Bitcoin ETP shares today, we did not approve or endorse Bitcoin. Investors should remain cautious about the myriad risks associated with Bitcoin and products whose value is tied to crypto.”

Why did Wood criticize Gensler?

Wood said that she was taken aback by Gensler’s statement and that it was an act against innovation. She said that this was par for the course in disruptive innovation and that there are many people who are curious out there about cryptocurrencies.

She told Bloomberg Radio: “He just denigrated the whole crypto space. I couldn’t believe it. This is par for the course in disruptive innovation.”

She added: “There are so many people who are curious out there.”

How did Wood react to the approval?

Wood also commented on the approval of spot Bitcoin ETFs by Ark Investment Management in collaboration with 21Shares. The application was among one of the dozen ETFs that received authorization from the SEC to start trading on Thursday.

She said that this would open a new chapter for Bitcoin and that she would like to believe that Ark would be within the top three or two providers through this Bitcoin ETF. She also said that institutions will need to work through this new framework with more diligence.

She said: “This opens a new chapter for Bitcoin and I would like to believe we will be within the top three or two providers through this Bitcoin ETF. Given [the SEC’s] ‘trepidation,’ institutions will need to work through this new framework with more diligence.”

What does this mean for crypto?

The approval of spot Bitcoin ETFs by the SEC is seen as a major milestone for crypto enthusiasts who have been waiting for years for such a product. It could also boost institutional adoption and demand for cryptocurrencies, as well as increase their liquidity and accessibility.

However, it could also face regulatory hurdles and challenges from other countries that may not recognize or accept such products. Moreover, it could also trigger more scrutiny and criticism from regulators like Gensler who may not share Wood’s optimism or vision for crypto.

Therefore, while Wood’s reaction may seem harsh or emotional at first glance, it reflects her passion and conviction for crypto as well as her disappointment with what she perceives as a lack of support from regulators like Gensler.