Cathie Woods Ark Invest is launching an exchange-traded Bitcoin fund, according to a filing with the Securities and Exchange Commission.
Wood – a longtime Bitcoin bull – has bought proxies for the digital asset in names like Coinbase and Grayscale Bitcoin Trust. Now the innovation investor wants to own the actual asset himself.
The ETF’s investment objective is to track the performance of Bitcoin, according to the SEC filing. The fund would trade under the ticker symbol “ARKB” if the SEC clears. Ark Invest is working with 21Shares to launch the ETF.
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Bitcoin has been hovering around $ 34,000 in the past few weeks as it struggles to recapture its May highs. Many in the trading community have been keeping a close eye on whether they would hold at $ 30,000 as they continued their decline. Some still say it could drop as low as $ 20,000 before recovering.
However, the digital asset has almost halved from its all-time high of about $ 63,000 in April. China’s crackdown on bitcoins, Tesla CEO Elon Musk’s decision to stop accepting bitcoin for its electric vehicles, and the excessive risk-taking of crypto traders have all contributed to the recent price volatility.
Ark Invest acknowledged the volatility associated with the digital asset in the “Risk Factors” section of the filing.
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“Bitcoin’s market value is not tied to any particular company, government, or asset. The valuation of Bitcoin depends on future expectations regarding the value of the Bitcoin network, the number of Bitcoin transactions, and the overall use of Bitcoin as an asset. This means that a significant part of Bitcoin’s value 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, ”the S1 filing states.
The SEC postponed a decision to approve the first Bitcoin ETF again last week. The latest move comes as SEC chairman Gary Gensler calls for tighter regulation of cryptocurrency exchanges and greater investor protection.
So far, eight more Bitcoin ETFs have been filed with the SEC.
Coinbase, the world’s largest cryptocurrency exchange, is among the top 10 holdings of Wood’s flagship fund Ark Innovation. Grayscale Bitcoin Trust is in the top 10 of the Ark Next Generation Internet ETF.
Wood has said that she sees a future where Bitcoin will be part of a balanced investment portfolio. Ark Invest estimates that if 1% of every company’s corporate cash in the S&P 500 were converted to Bitcoin, the asset’s price would rise by more than $ 40,000 from its current level. If the cash holdings of every company in the broader stock index increased to 10%, the price of Bitcoin would increase by more than $ 400,000, the company said.
With Gensler – a longtime financier who taught a digital currency course at the Massachusetts Institute of Technology – nominated to head the Securities and Exchange Commission, the watchdog could warm to crypto during Biden’s administration, Wood told CNBC earlier this year .
Wood’s disruptive innovation funds recently turned a corner after months of underperformance amid a rotation in value stocks. Ark Innovation’s shares were up more than 16% in June.
– CNBC’s Tanaya Macheel and Yun Li contributed to this report.
