ARK’s revised application for a spot Bitcoin ETF indicates a positive signal for potential approval.

A recent modification to the joint spot Bitcoin (BTC) exchange-traded fund (ETF) application from ARK Invest and 21Shares may be interpreted as a “positive indication” of advancement and forthcoming approvals.

An updated filing submitted on Oct. 11 to the United States Securities and Exchange Commission for approval incorporates further details regarding the proposed spot Bitcoin ETF, including methodologies for asset custody and valuation.

Bloomberg’s senior ETF analyst Eric Balchunas remarked that the revisions might directly address concerns that the SEC has requested ETF issuers to clarify.

“This indicates that ARK received the SEC’s feedback and has addressed all of it, effectively returning the responsibility to the SEC,” Balchunas stated. “[In my view] a positive indication, significant progress.”

There's 5 extra pages in new S-1 but the new stuff is sprinkled throughout like the two above egs. So what does this mean? It means ARK got the SEC's comments and has dealt with them all, and now put ball back in SEC's court. IMO good sign, solid progress.

— Eric Balchunas (@EricBalchunas) October 11, 2023

Balchunas noted that the updates are “interspersed throughout,” resulting in the new filing being five pages longer, adding in a separate post that “none of the comments were particularly new or unmanageable.”

Among the changes, ARK indicated that the fund’s net asset value (NAV) calculations do not conform to the Generally Accepted Accounting Principles (GAAP) — an accounting standard utilized by the SEC, according to Balchunas.

The updated filing also specifies that the ETF’s assets, managed by Coinbase Custody, are maintained in “segregated accounts […] and are therefore not mixed with corporate or other customer assets.”

This is also new (and again something we heard SEC asked about): "The Trust’s assets with the Custodian are held in segregated accounts on the bitcoin blockchain, commonly referred to as “wallets,” and are therefore not commingled with corporate or other customer assets." pic.twitter.com/57TmnNi1lE

— Eric Balchunas (@EricBalchunas) October 11, 2023

Another Bloomberg ETF analyst, James Seyffart, commented in an X post that this latter change indicates that ARK and others are engaging with the SEC regarding what the regulator wants clarified.

“A positive indication for future approval in my opinion,” he added.

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Scott Johnsson, general partner at Van Buren Capital, pointed out that another new addition was a remark stating that if BTC is increasingly utilized for illicit activities and if the environmental impact of Bitcoin mining leads to restrictions, then the ETF’s value could decline.

Still chuckling a bit at this “electricity usage” risk factor. Ark couldn’t even be bothered to put in a coherent header summary or more than a couple short sentences. You know the convo w/ the SEC was like “oh yea, good call Mr. SEC attorney, this is definitely material /s” https://t.co/unIArFDKl8

— Scott Johnsson (@SGJohnsson) October 12, 2023

Johnsson stated that, based on ARK’s amendments, it “doesn’t appear that the agency is imposing any unnecessary obstacles through disclosure review.”

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