Even though Bitcoin and its ilk have been on a downward trend lately, ARK Invest CEO Cathie Wood remains optimistic about the sector. Now the investor, who is known for her successful funds, is planning to launch a Bitcoin ETF. An application to this effect has already been submitted to the US Securities and Exchange Commission (SEC).
ARK Invest buys in Coinbase shares and Grayscale Bitcoin Trust
Despite significant price drops in recent weeks, ARK Invest founder Cathie Wood is far from dropping bitcoin. Not only did the “best investor in the world” recently buy Coinbase shares and shares in Grayscale Bitcoin Trust for her ETFs, but she also maintains her bullish forecast for the crypto-legend. She recently confirmed to Bloomberg that she still expects a long-term bitcoin price of US$500,000. Now the notorious investor has more news to announce from the crypto sector.
Cathie Wood wants to launch Bitcoin ETF
A filing with the US Securities and Exchange Commission (SEC) reveals that Wood’s investment company ARK Invest is currently working on a Bitcoin ETF. The financial product is to be traded under the name “ARK 21Shares Bitcoin ETF”. This is to be made possible by a cooperation with the Swiss crypto company 21Shares, whose US subsidiary will act as a sponsor within the framework of the ARK ETF. 21Shares already offers a variety of exchange-traded financial products – including the 21Shares Bitcoin ETP, which the company says is the “first physically-backed bitcoin product”. In May, Wood also joined the board of 21Shares operator Amun Holdings, according to Bloomberg. ARK’s bitcoin ETF is expected to trade under the ticker symbol “ARKB”, according to the filing. If approved, the investment firm’s latest financial product will trade on CBOE Global Markets. The ETF will also track the S&P Bitcoin Index.
Delaware Trust Company will act as the trustee, while Coinbase Custody Trust Company will act as custodian, managing all of the trust’s bitcoin, according to the document.
Are crypto ETFs ill-starred?
The idea of an ETF that tracks the largest cryptocurrency by market capitalisation is not new. Compared to direct investment in cyber currencies, a corresponding financial product could give more investors access to the crypto sector, according to MarketWatch. However, in light of new SEC Commissioner Gary Gensler, who has been increasingly critical of the internet coin in the past, a crypto ETF is likely to be an ambitious goal on Woods’ part. According to a news report by Bloomberg, at least 14 companies have applied to the exchange authority for an ETF that tracks bitcoin or bitcoin futures, including Fidelity Investments and WisdomTree Investments in addition to Grayscale. So far, however, the applications have been rejected, their processing postponed or not yet decided.
Competition to Grayscale Bitcoin Trust
Should the SEC nevertheless approve the investor’s plans, it would put her in competition with the Grayscale Bitcoin Trust, in which her company is itself invested, as the portal further reports. Investors can acquire the cryptocurrency through it in the form of a traditional security without having to buy or hold it themselves. The trust is considered one of the largest crypto funds on the market. Grayscale also plans to convert it into an ETF.
“I don’t know if it will increase the chances of approval, but because it has a loyal investor following, if a bitcoin ETF is approved, it wants to be in the running,” Mohit Bajaj of WallachBeth Capital commented on Wood’s ambitions, as Bloomberg writes. A spokeswoman for ARK Invest did not initially want to comment on the plans for the Bitcoin ETF to the market portal “MarketWatch”. It, therefore, remains to be seen whether Wood will be able to prevail over competitors with her latest ETF project – and whether she will be successful before the US authorities.