Cathie Wood Explains SEC’s Sudden Approval of Ethereum ETFs: Cryptocurrency Emerges as a Key U.S. Election Matter
SEC Surprises with Approval of Ethereum ETFs, Influenced by Political Developments
In a recent interview with Peter McCormack on the What Bitcoin Did podcast, Cathie Wood, CEO and CIO of ARK Invest, made a significant statement about the intersection of cryptocurrency and U.S. politics. Wood revealed that this political shift played a crucial role in the surprising approval of several ether exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC).
During the Consensus 2024 conference on May 29, Wood discussed the unexpected approval of spot Ethereum ETFs by the SEC. She attributed this decision to two main factors: the passage of the Financial Innovation and Technology for the 21st Century Act (FIT21) by the House and former President Donald Trump’s increasing involvement with the crypto community.
Wood emphasized the significance of FIT21, which has made cryptocurrency a major electoral issue. Alongside this, Trump’s acceptance of Bitcoin and other cryptocurrencies, demonstrated through his campaign’s acceptance of crypto donations, signaled a significant shift in the political landscape.
Wood believes that these developments caught the attention of the Biden administration, ultimately leading to the SEC’s sudden approval of the ETFs.
Prior to this unexpected approval, the SEC had shown no indication of progressing with the pending spot ETH ETFs. Typically, the agency would have posed numerous questions to the issuers during the review process. However, Wood noted that “no one was getting questions from the SEC beforehand.”
On May 23, the SEC approved rule changes that allow the listing and trading of eight spot ETH ETF funds, including the joint offering by ARK and 21Shares. This sudden shift has generated mixed reactions within the financial community.
In subsequent interviews, Wood expressed her preference for Bitcoin over Ethereum. At Consensus 2024, she described Bitcoin as her top investment choice, highlighting its unique qualities as a “global monetary system,” “technology,” and “new asset class.” Wood believes that Bitcoin’s potential surpasses that of other cryptocurrencies.
Wood envisions Bitcoin capturing up to 20% of the global monetary supply, citing examples like El Salvador, where Bitcoin is legal tender. She sees Bitcoin as an “insurance policy” against economic instability.
Wood also commended El Salvador’s Bitcoin policies after meeting with President Nayib Bukele. She praised Bukele’s approach to Bitcoin, AI, and other technologies, predicting that these policies could boost the country’s GDP within five years. Wood called Bitcoin and AI “two of the biggest economic and technology revolutions in history.”
El Salvador’s government, which holds at least 5,700 BTC, plans to generate income from Bitcoin mining, support local businesses, and offer citizenship to Bitcoin investors. Bukele has also introduced ARK Educate’s tech-focused curriculum in schools.