Ark Invest’s goal is to make Bitcoin more accessible to the general public by launching Bitcoin futures exchange-traded funds and investing significantly in cryptocurrency goods.
Ark Invest, the asset management company established by cryptocurrency enthusiast Cathie Wood, is expanding its cryptocurrency strategy and has now officially given its name to an exchange-traded fund tracking bitcoin futures.
A bitcoin futures contract is not synonymous with a bitcoin token. Whoever owns futures contracts does not own the cryptocurrency, but rather rights to a contract between parties to buy an item in the future at a certain price in the present.
Ark Invest Supports the Creation of a US-Regulated Bitcoin ETF
According to a report, Ark Invest has joined the ranks of institutions filing for a bitcoin exchange-traded fund. The ARK 21Shares Bitcoin Futures Strategy ETF, ticker ARKA, would invest in bitcoin futures rather than the underlying cryptocurrency, which may ease its acceptance in light of Gary Gensler’s recent comments on the subject.
Futures markets are more volatile but have the benefit of not requiring players to protect their assets, which is a financial and regulatory advantage since the regulations are more clear because every futures contract is completely controlled by the CFTC.
Ark Invest’s most recent filing indicates that the fund is investing in bitcoin futures exchange-traded funds that are properly regulated in the United States.
The Fund is an actively managed exchange-traded fund (“ETF”) that seeks to achieve its investment objective by investing in exchange-traded bitcoin futures contracts that are cash-settled in US dollars and traded on or are governed by commodity exchanges registered with the Commodity Futures Trading Commission (“CFTC”), such as the Chicago Mercantile Exchange (the “CME”) (“Bitcoin Futures”). The Fund does not make direct investments in bitcoin or other cryptocurrencies. This is a positive development for the American market since Ark Invest was previously focused on the crypto-friendly Canadian sector.
Increasing the Effort Into its Crypto Strategy
According to SEC filings, another Ark Invest ETF, the ARK Next Generation Internet ETF (ARKW), is capable of investing in Canadian cryptocurrency ETFs as well as the Grayscale Bitcoin Investment Trust (“GBTC”). While not an ETF, the latter is a US-regulated product that provides indirect exposure to the Bitcoin price via the purchase of shares in a trust that owns significant quantities of BTC (approximately 3 percent of all the coins currently in circulation).
Cryptocurrency is a new asset class that is gaining traction. There are hundreds of cryptocurrencies, with bitcoin being the most well-known. The fund may have indirect exposure to bitcoin through an investment in the Bitcoin Investment Trust (“GBTC”), a privately offered, open-end investment vehicle that invests in bitcoin, or other pooled investment vehicles that invest in bitcoin, such as exchange-traded funds domiciled and traded in Canada (“Canadian Bitcoin ETFs”).
Additionally, the portfolio includes exposure to businesses that have substantial bitcoin holdings or are actively engaged in the cryptocurrency sector. The ETF invests in Coinbase – the country’s first regulated public crypto exchange – Tesla – a company owned by crypto enthusiast Elon Musk and holding 42,000 Bitcoin – and Square – the crypto-friendly payment processor founded by Bitcoin maximalist and Twitter co-founder Jack Dorsey and holding more than 8,000 BTC.
Also Read: The World’s Largest Asset Manager Is Excited About “Cryptocurrencies”
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