Ark Investment Management LLC, founded by Cathie Wood, has revised its prospects. As the investment management firm finds new methods to gamble on digital assets, they may now invest in Canadian Bitcoin ETFs.
According to a recent supplement filing with the US Securities and Exchange Commission (SEC), Cathie Wood’s ARK investment management business has permitted itself to acquire Canadian Bitcoin Exchange-Traded Funds. The firm’s investment product (ARK Next Generation Internet ETF) has been amended to allow the fund to invest in Canadian Bitcoin ETFs.
The firm’s fund (ARK Next Generation Internet ETF) could previously only invest in Bitcoin through a grantor trust like the Grayscale Bitcoin Trust.
The action by Ark Investment Management comes after the market regulator (the US SEC) has repeatedly delayed and rejected comparable products in the United States, prompting the business to look for alternatives abroad.
Since Ark Investment Management filed the supplement with the Securities and Exchange Commission on Friday, September 10, its fund (the US$5.7 billion ARK Next Generation Internet ETF) now has another way to acquire indirect exposure to Bitcoin investments.
The fund can now invest in other pooled investment vehicles, such as ETFs located in Canada, in addition to the Grayscale Bitcoin Trust (GBTC).
The ARK Next Generation Internet ETF has already invested in Bitcoin, with about 5.5 percent of its assets in the GBTC.
Although the Grayscale Bitcoin Trust is one of the simplest methods for investors in the United States to access crypto assets through a fund, its structure makes it inefficient. Its value is frequently decoupled from that of Bitcoin.
With the latest addition, ARK may be attempting to gain more Bitcoin exposure at a lower cost, through channels with better liquidity, and without paying GBTC premiums.
The approval of a Bitcoin ETF has been delayed.
Ark Investment Management’s action comes amid a long queue of at least 18 applications for Bitcoin-based Exchange Traded Funds (ETFs) submitted with the US Securities and Exchange Commission (SEC).
Grayscale has been waiting for regulatory clearance to convert its well-known trust, GBTC, into an exchange-traded fund (ETF). In addition, Fidelity, Global X, SkyBridge Capital, VanEck, Valkyrie, NYDIG, and others have also applied for a Bitcoin ETF listed in the United States.
The Securities and Exchange Commission has yet to approve a physical Bitcoin ETF in the United States, and it is unlikely to do so anytime soon.
SEC Chairman Gary Gensler has stated that a futures-based Bitcoin ETF would be considered under stringent guidelines. Following Gensler’s comments, numerous businesses applied to the SEC for futures-based Bitcoin ETFs.
Even though Gensler seems more comfortable with futures-based Bitcoin ETFs than physical ones, approval is still a long way off.
This is due to concerns raised by the Securities and Exchange Commission. Aside from concerns about fraud and volatility in the crypto world, the SEC is also concerned about how actual Bitcoin ETF demand may affect the broader market.