Growing anticipation around the potential approval of spot Bitcoin (BTC) exchange-traded funds (ETFs) could negatively impact the BTC price in the short term, according to ARK Invest’s CEO.
Cathie Wood, founder, CEO and chief investment officer of ARK Invest, believes that some investors are likely to “sell on the news” once a spot Bitcoin ETF is approved by securities regulators in the United States.
Wood expects that some investors will not want to miss the opportunity to take some profits, as there has been a “big anticipatory move” based on the expectation of potential approval of a spot Bitcoin ETF, she said in an interview with Yahoo Finance on Dec. 26. The ARK CEO stated:
“Those who have been moving in and enjoying some nice profits will probably ‘sell on the news.’ That’s an expression that traders use, so you anticipate the event, beat up the price, and then sell on the news.”
While the short-term impact of potential spot Bitcoin ETF approval could be associated with some investors selling, the long-term perspective is promising and more important, according to Wood.
“That would be very short-term because what we think is going to happen here is that the SEC is going to be giving the spot Bitcoin ETF the green light for institutional investors to participate,” the investor stated.
Once approved, a spot Bitcoin ETF will become one of the easiest ways for institutions to access BTC, allowing them to allocate a small portion of trillions of dollars in assets to Bitcoin, the ARK CEO believes. According to Wood, Bitcoin’s price would move significantly if institutional investors put at least 0.1% or 0.2% of their assets into Bitcoin, which has a supply cap of 21 million coins.
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Wood’s ARK Invest is one of 14 firms that have filed for a spot Bitcoin ETF with the U.S. Securities and Exchange Commission. ARK’s spot Bitcoin ETF, the ARK 21Shares Bitcoin ETF, is developed in collaboration with the European crypto exchange-traded product provider 21Shares.
In her latest interview, Wood noted that spot Bitcoin ETF discussions with the SEC have been “very positive,” adding more optimism about the potential of the first spot Bitcoin ETF or ETFs being approved by Jan. 10.
“Something did change within the last month to six weeks,” Wood stated, adding that the SEC has changed its approach to the Bitcoin ETF reviews from silent denials to asking “thoughtful, detailed, technical questions.”
According to Wood, that’s a very positive move that has led to fruitful dialogue with the SEC. “I think the outlook is bright for a spot Bitcoin ETF, and we do think it will be in January,” Wood stated.