Could there be a new exchange-traded fund (ETF) that invests in just the cryptocurrency Bitcoin (CRYPTO: BTC)? That’s certainly what it’s looking like. Until recently, regulatory authorities around the world have been reluctant to allow listed ETFs to invest in cryptocurrencies like Bitcoin. This can probably be put down to Bitcoin’s decentralisation. As well as its lack of regulatory structure and its famous (or infamous) volatility.
Our own ASX does not currently have any kind of ETF that is approved for cryptocurrency assets. And China has banned Bitcoin entirely. But according to a report in today’s Australian Financial Review (AFR), the waters could be changing.
According to the report, Cathie Wood’s ARK Invest funds management company has filed to list a bitcoin ETF product. This product has the tentative name of ARK 21Shares Bitcoin ETF and will aim to trade under the ticker code ‘ARKB’ on the US share markets. It would reportedly track the pure performance of Bitcoin as measured by the S&P Bitcoin Index and would hold Bitcoin assets itself.
An ARK Bitcoin ETF?
Eric Balchunas, ETF analyst for Bloomberg Intelligence, told the AFR the following on the proposal:
This makes a lot of sense because Cathie is on the board of 21Shares, which is a big progressive crypto issuer in Europe… This gives 21Shares penetration in the US and it’s on-brand for Ark given how vocal and bullish they’ve been on crypto.
For anyone who follows ARK Invest, this move would come as no surprise. ARK and its CIO Cathie Wood have long been vocal about their Bitcoin bullishness. Ms Wood has floated a long-term price target of US$500,000 for the cryptocurrency and has invested a significant proportion of ARK’s funds into Bitcoin linked assets in the past.
But ARK is most famous for its high-growth ETFs that are already available on the US share markets. ARK’s flagship ETF is the ARK Innovation Fund (NYSE: ARKK). This ETF invests in growth companies like Tesla Inc (NASDAQ: TSLA), Square Inc (NYSE: SQ) and Zoom Video Communications Inc (NASDAQ: ZM). The Fool recently looked at some of the other ARK ETFs available, and the types of companies they invest in.
So it will be interesting to see how this latest ARK Invest foray into Bitcoin turns out. Who knows, we might even see a Dogecoin (CRYPTO: DOGE) ETF one day.