Ark Invest, the asset management firm founded by crypto enthusiast Cathy Wood, wants to accelerate its crypto strategy and has now officially renamed itself the ETF to track bitcoin futures.
The future of bitcoin is not actually the same as the bitcoin token. Everyone who holds a futures contract does not actually hold the cryptocurrency, but rather has rights in an agreement between the parties to purchase an asset In the future at a fixed price in present.
Ark Invest believes in US regulated Bitcoin ETFs
According to Bloomberg, Ark Invest is joining the race for institutions with ETF cryptocurrency applications. The ETF ARK 21Shares Bitcoin Futures Strategy, the ARKA Index, will invest in bitcoin futures rather than the cryptocurrency itself, which could facilitate approval, given Gary Gensler’s recent words on the matter.
Futures markets tend to be more volatile but have the advantage that participants do not have to protect assets, a financial and regulatory advantage as there is greater clarity in the rules because every futures contract is regulated by the CFTC without any doubt whatsoever.
According to the latest filings from Ark Invest, the fund invests in bitcoin futures ETFs that are properly regulated by the United States.
The Fund is an actively managed exchange fund (“ETF”) that seeks to achieve its investment objective by investing, under normal circumstances, in exchange-traded Bitcoin futures that are cash-settled in US dollars and are traded, or subject to the rules of commodity exchanges. Registered with the Commodity Futures Trading Commission (“CFTC”), such as the Chicago Mercantile Exchange (“CME”) (“Bitcoin Futures”). The fund does not directly invest in bitcoin or other digital assets.
This is a step forward for the US market, considering Ark Invest has been heading towards the crypto-friendly Canadian market.
Push gas towards coding strategy
According to information provided by the Securities and Exchange Commission (SEC), another Ark Invest EFT, the ARK Next Generation Internet ETF (ARKW) is capable of this in Canadian ETFs as well as the Grayscale Bitcoin Investment Fund (“GBTC”). The latter, although not an ETF per se, is a US regulated product that allows indirect exposure to the price of Bitcoin by buying shares on credit containing large amounts of BTC (about 3% of all coins currently in circulation).
Cryptocurrency is an emerging asset class. There are thousands of cryptocurrencies, the most famous of which is Bitcoin. The Fund may be exposed to Bitcoin indirectly through an investment in the Bitcoin Investment Trust (“GBTC”), an open-end investment vehicle provided by the private sector that invests in Bitcoin, or other pooled investment vehicles that invest in Bitcoin, such as exchange-traded funds domiciled and listed for trading in Canada (“Canadian Bitcoin ETFs”).
The fund also deals with companies that have significant investments in bitcoin or are otherwise involved in the cryptocurrency industry. The ETF invests in shares of Coinbase – the first regulated public crypto exchange in the US, Tesla – a company owned by crypto enthusiast Elon Musk, which holds 42,000 Bitcoin – and Square – the crypto-friendly payment processor founded by Bitcoin maximalist and Jack Dorsey, co-founder of Twitter, which She owns more than 8000 bitcoins.
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