Cathie Wood’s ARK Invest filed an application with the Securities and Exchange Commission on Monday to create a Bitcoin exchange-traded fund.
Wood – a longtime bitcoin bull – bought proxies for the digital asset under names like Coinbase and Grayscale Bitcoin Trust. Now, the innovation investor seeks to own the 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 ARKB, if approved by the SEC.
Bitcoin has hovered around $ 34,000 over the past two weeks as it struggles to recover its May highs. Many in the trading community kept a watchful eye to see if it would hold at $ 30,000 as it continued to decline. Some still say it could drop as much as $ 20,000 before rebounding.
However, digital assets have almost halved since their all-time high of around $ 63,000 in April. China’s bitcoin crackdown, Tesla CEO Elon Musk’s decision to stop accepting bitcoin for his electric vehicles, and excessive risk-taking by crypto traders have all contributed to recent price swings.
ARK Invest acknowledged the volatility associated with digital assets in the ârisk factorsâ section of the dossier.
âThe market value of bitcoin is not tied to any specific 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 a This means that a significant portion of the value of bitcoin is speculative, which could lead to increased volatility. Investors could experience significant gains, losses and / or volatility in the holdings of the trust, depending on bitcoin valuation â, indicates the S1 file.
Last week, the Securities and Exchange Commission again postponed the decision to approve the first bitcoin ETF. The latest action comes as SEC Chairman Gary Gensler called for more 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 ten holdings of Wood’s flagship fund, ARK Innovation. Grayscale Bitcoin Trust is one of the top ten holdings in ARK Next Generation Internet ETF.
Wood said she sees a future where bitcoin is part of a balanced investment portfolio. ARK Invest estimates that if 1% of each company in the S&P 500 were converted to bitcoin, the asset’s price would rise by more than $ 40,000 from current levels. If the level of liquidity increased to 10% for each company in the larger stock index, the price of bitcoin would rise 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 – being appointed to head the Securities and Exchange Commission, the watchdog could heat up to crypto during the Biden administration, said Wood on CNBC earlier this year.
Wood’s disruptive innovation funds recently turned a corner after months of underperformance amid a rotation to value stocks. ARK Innovation shares rose more than 16% in June.
– with reports by Tanaya Macheel and Yun Li of CNBC.