As Ark Invest and 21Shares remain in pursuit of a spot bitcoin ETF, they’re also looking to bring three other crypto funds to market.
The new product proposals were submitted to the Securities and Exchange Commission the same day the regulator chose to delay its decision on the companies’ ETF that would hold bitcoin directly.
Empowered Funds, a subsidiary of white-label ETF platform Alpha Architect, is listed as the investment adviser of the proposed funds. 21Shares and Ark Invest would serve as sub-advisers.
One of the ETFs would invest in cash-settled bitcoin futures contracts traded on the Chicago Mercantile Exchange (CME), according to an Aug. 11 filing. The planned offering — to be called Ark 21Shares Active Bitcoin Futures ETF (ARKA) — can also hold US Treasury securities, money market instruments and repurchase agreements.
A second proposed fund, the Ark 21Shares Active On-Chain Bitcoin Strategy ETF (ARKC), would similarly invest at least 25% in bitcoin futures contracts, or ARKA — and the remaining assets to cash and cash equivalents.
But unlike ARKA, the so-called on-chain fund uses a proprietary trend indicator to formulate its allocation strategy by determining whether the bitcoin (BTC) market trend is bullish or bearish. Inputs to the trend indicator could include historical price data or on-chain data, the document adds.
Finally, a proposed Ark 21Shares Digital Asset and Blockchain Strategy ETF — to trade under the ticker ARKD — would allocate to bitcoin futures contracts or ARKA, as well as the equities of companies across the blockchain, digital asset and fintech industries.
A spokesperson for Ark Invest declined to comment on the filings. 21Shares did not immediately return a request for comment.
Ark and 21Shares linked up in 2021 to try to launch a spot bitcoin ETF. The SEC denied the companies’ proposed ETF in March 2022 and blocked a second attempt from the companies in January.
The two companies re-filed for a spot bitcoin ETF in April. The proposal came a couple months before asset management giant BlackRock entered the bitcoin ETF race in June — leading firms who had previously tried to launch such a fund to quickly re-file.
The SEC said Friday it would “institute proceedings” to determine whether it should approve or deny the Ark 21Shares Bitcoin ETF — a type of fund the regulator has never greenlit.
Bloomberg Intelligence analyst Eric Balchunas pointed out one of the ETF filings in a Monday tweet. Nate Geraci, president of The ETF Store, called the filing “odd,” adding that it could mean Ark Invest is “not that confident” its spot bitcoin fund will be approved.
Many crypto ETFs are among the top-performing funds so far this year. The Valkyrie Bitcoin Miners ETF (WGMI) leads the way, with a year-to-date return of 219%, according to VettaFi’s ETF Database.
The ProShares Bitcoin Strategy ETF (BITO) — the first and largest bitcoin futures ETF — is up 71% since the start of the year. The Global X Blockchain and Bitcoin Strategy ETF (BITS), which deploys a blended strategy similar to the proposed ARKD fund, has returned 112% so far in 2023.
Ark and 21Shares are not the only ones on a crypto product proposal spree. Bitwise Asset Management and ProShares combined for seven ether-related ETF proposals earlier this month.
Bitwise also has an active spot bitcoin ETF filing. The SEC is set to approve, deny or say it needs more time to consider that product by Sept. 1.
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Source: https://blockworks.co/news/ark-21shares-spot-bitcoin-etf