Cathie Wood’s Ark Invest Files To Create Bitcoin ETF

Bitcoin ETF cryptocurrency trading and investment concept on double exposure background.
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Cathie Wood’s Ark Invest is launching a Bitcoin exchange traded fund, according to a Securities and Exchange Commission filing.

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The ETF’s investment objective seeks to track the performance of bitcoin, as measured by the performance of the S&P Bitcoin Index, according to the SEC filing. If approved, the ARK 21Shares Bitcoin ETF will trade under the ticker “ARKB.”

The ETF’s prospectus takes note of the crypto’s volatility, mentioning that the valuation of bitcoin depends on future expectations for the value of the Bitcoin network, the number of bitcoin transactions, and the overall usage of bitcoin as an asset. “This means that a significant amount of the value of bitcoin is speculative, which could lead to increased volatility. Investors could experience significant gains, losses and/or volatility in the Trust’s holdings, depending on the valuation of bitcoin,” according to the prospectus.

“Several factors may affect the price of bitcoin, including, but not limited to: supply and demand, investors’ expectations with respect to the rate of inflation, interest rates, currency exchange rates or future regulatory measures (if any) that restrict the trading of bitcoin or the use of bitcoin as a form of payment. The issuance of bitcoin is determined by a computer code, not by a central bank, and prices can be extremely volatile,” it adds.

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Investors and investment managers have anxiously been awaiting a decision from the SEC on the approval of Bitcoin ETFs, which would have to be traded on the “exchange” — in other words, on the stock market (and therefore, only during the hours the stock market is open). Right now, cryptos don’t have any such limitations and can be traded anytime.

While several companies have filed crypto ETFs with the SEC, the Commission has either rejected or delayed its decisions on many of them. VanEck for example, registered its ETF in March, and the SEC usually takes 45 days to approve or disapprove a filing. In a statement in April, the Commission said it was extending the period — which should have ended May 3 — and pushed it to June 17.

“The Commission finds that it is appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the comments received,” according to the statement at the time.

But last week, the SEC extended the period a second time, according to a filing.

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Meanwhile, WisdomTree, whose Bitcoin ETF was registered in April, saw its decision pushed to July 14 from May 30, according to an SEC notice. Asset management behemoth Fidelity also filed a Bitcoin ETF in March, which is under review.

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Last updated: June 30, 2021

About the Author

Yaël Bizouati-Kennedy is a former full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.

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