Invests in Bitcoin Futures ETF

Crypto News: Cathie Wood goes all in on bitcoin futures ETF with Ark invest

Cathie Wood, the founder and CEO of Ark Invest, is known for her bold and innovative bets on disruptive technologies. She has been a vocal supporter of Bitcoin and cryptocurrencies and has invested heavily in companies that are related to the digital asset space, such as Coinbase, Square, and Tesla. Now, she is making another bold move: investing in a bitcoin future ETF.

Cathie Wood’s ARK Invest purchased 4.3 million shares of the ProShares Bitcoin Strategy ETF, often known as ‘BITO,’ which tracks the price of futures contracts connected to the world’s largest cryptocurrency, according to a trade notice on Thursday.

The first bitcoin futures ETF in the U.S., the ProShares Bitcoin Strategy ETF, launched on October 19, 2023, saw a massive demand from investors, with crypto trading over US$1 billion worth of shares on its debut day. The second bitcoin futures ETF, the Valkyrie Bitcoin Strategy, launched on October 20, 2023, and also attracted significant interest, trading over US$200 million worth of shares on its first day.

Wood’s Ark Invest was among the early buyers of both ETFs, according to regulatory filings. Ark Invest bought 1.3 million shares of the ProShares ETF, worth about US$44 million, and 275,000 shares of the Valkyrie ETF, worth about US$9 million, on their respective launch days. These purchases represent a small fraction of Ark Invest’s total assets under management, which stood at US$54 billion as of October 20, 20235, but they signal Wood’s confidence and conviction in the long-term potential of Bitcoin.

Wood has been advocating for a spot bitcoin ETF, which would offer direct exposure to the cryptocurrency, for a long time. She has also filed for her spot bitcoin ETF, in partnership with 21Shares, a crypto-focused firm, in June 2023. However, the U.S. Securities and Exchange Commission (SEC) has not yet approved any spot bitcoin ETF, citing concerns over market manipulation, investor protection, and custody issues.

Wood believes that the approval of a spot bitcoin ETF is inevitable, and that the odds are going up, especially after the launch of the bitcoin futures ETFs. She said in a recent media call that she is optimistic that the SEC will eventually greenlight a spot bitcoin ETF, as it has done in other countries, such as Canada and Brazil.

“We are partnering with 21Shares in the U.S., hoping to launch a bitcoin ETF, if it’s ever approved by the SEC. We think the odds are going up that it will be approved,” Wood said.

According to Reuters’ calculations, ARK’s holding is worth around US$92 million based on the fund’s closing price on Wednesday.

After a disastrous 2022, the crypto market is on the mend, with Bitcoin up more than 150% so far this year.

Big asset managers, including BlackRock, are awaiting regulatory permission from the Securities and Exchange Commission (SEC) before launching a slew of derivative-based products, such as ETFs tracking Bitcoin’s current price.

ARK has also refiled documents with the SEC, in collaboration with 21Shares, seeking permission for a spot bitcoin ETF ARK 21Shares Bitcoin ETF after the agency claimed its first prospectus did not fulfil the conditions to avoid fraud and market manipulation.

Separately, ARK Invest sold Coinbase Global shares for around US$27.6 million, based on the crypto exchange’s most recent closing price. Coinbase’s stock has risen more than 400% this year.

The ProShares exchange-traded fund, which debuted in October 2021 as the first bitcoin-linked ETF in the United States, presently holds 5.03% of the ARK Next Generation Internet ETF (ARKW), making it the fund’s sixth-largest holding. The fund no longer owns any GBTC shares, with the latest recorded sale taking place on December 20. Despite the sale of 148,885 shares on Wednesday, Coinbase remains the fund’s largest holding at little under 12%.

The adjustment in holdings comes ahead of the Securities and Exchange Commission’s decision next month on whether to allow spot bitcoin ETFs to trade in the US. Grayscale and Ark 21Shares have both submitted ETF applications to the regulator, who is currently meeting with applicants.

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