Cathie Wood Plans to Bring Bitcoin ETF ARKB to the Market
Make way for another Ark Invest ETF from Cathie Wood. Here's what to expect from the ARK Invest Bitcoin ETF (ARKB).
June 29 2021, Published 12:24 p.m. ET
Just a few months after launching the ARK Space Exploration & Innovation ETF (ARKX), Ark Invest is preparing another thematic fund. This time, Cathie Wood's asset manager will partner with a separate ETF provider for a Bitcoin ETF (ARKB) that satisfies the cryptocurrency sector.
When is ARKB hitting the market, and what can investors expect from this ETF?
The ARKB Bitcoin ETF is brought to you by Ark Invest and 21Shares
Ark Invest is known for a selection of actively managed ETFs that target specific sectors of innovation (from genomic editing like CRISPR to autonomous tech and robotics). The upcoming Bitcoin ETF is different because Ark is partnering with a crypto ETF provider called 21Shares.
Ark's partnership with 21Shares is smart considering the latter company's focus on cryptocurrency. This should give investors some semblance of confidence in the fund considering that Ark isn't stepping too far out of its comfort zone. After all, the company hasn't proven itself in the crypto domain yet. Due to Wood's bullishness on Bitcoin, the development of this fund isn't a surprise.
ARKB will track the S&P Bitcoin index
Funds track an index, whether that index is custom from the asset manager or a common index used by other funds. For ARKB, that index is the S&P Bitcoin index.
The S&P Bitcoin index is one of the S&P Dow Jones indices. As of June 28, the index is up 275.35 percent over the last year. The three-year and five-year returns are more stable at 78 percent and 121 percent, respectively.
ARKB might not track the index to a tee, but it will likely reflect it closely. This is especially true given that Ark says the ultimate goal for the fund is simply to track the price of Bitcoin from a U.S. securities standpoint.
Unlike other Ark funds, ARKB is set to trade on the Cboe BZX exchange
Most Ark funds trade on the BATS exchange, but ARKB is targeting the Cboe BZX Exchange. This shows that ARKB is a slight change of pace for Ark Invest, but when has change scared Wood?
The Ark Bitcoin ETF is still awaiting SEC approval.
The SEC has a full lineup of Bitcoin ETFs ready to approve or deny. VanEck has been awaiting approval for its own fund for months. For years, the commission has denied at least a dozen Bitcoin ETFs out of fear that investors won't be protected and the market will be more susceptible to manipulation. The idea of decentralized cryptocurrency and regulated ETFs fusing into one financial product leaves regulators at a loss.
Sit tight—it might be awhile until ARKB shares are available
Bitcoin's current volatility could delay the SEC approval process even more for ARKB and other providers of potential Bitcoin ETF funds. In the meantime, direct cryptocurrency investment is always an option. Cryptocurrency is becoming increasingly accessible as platforms like Venmo and Paypal make it easy to dip in on Bitcoin. Also, some existing Ark Invest funds already have Bitcoin-relevant securities in their baskets.