update 19 September 2021

Ark Investment Looks to Explore Cryptocurrencies More By Investing in Canadian EFTs

Cathie Wood’s Ark Investment Management grants one of its funds permission to invest in Canadian Bitcoin EFTs. The platform is looking for new ways to invest in digital assets.

Wood, a bitcoin supporter, has been buying up proxies for the digital asset in names such as Grayscale Bitcoin Trust and Coinbase. However, she is now focusing on owning the actual asset.

More Opportunities for Ark Investment

According to the SEC filing, Ark Investment will launch funds that offer investment in Canadian bitcoin ETF. The application states the Fund may invest in other funds listed in Canada. In specific though, the Canadian bitcoin ETFs.

Ark Investment has had prior exposure to Bitcoin. About 5.5 percent of the Fund dwells in Grayscale Bitcoin Trust (GBTC). The Trust has become an easy way for investors to access crypto in the U.S. through a fund. However, its structure makes it inefficient, and its value often detaches from Bitcoin.

Last week, GBTC was down 20% since the first Canadian Bitcoin went live in February. The Fund, Purpose Bitcoin ETF (BTCC), experienced a 9% drop.

High Volatility is Still an Issue

It, however, does not go without notice that the risks in such an investment are similar to bitcoin. The company also noted that the Fund might trade either a significant premium or discount to NAV. Technically, such applies to ETFs.

Bitcoin has been hovering around $34,000 in the last couple of weeks, struggling to recover its highs in May. Many in the trading industry kept an eye on whether it was holding $30Kor continuing to decline. Some still think that before rebounding, it might fall to 20,000 dollars.

The digital asset’s value has dropped in half since its all-time high of roughly $63,000 in April. The recent price swings were due to Chinese Bitcoin attacks. Also, Tesla CEO Elon Musk’s choice not to take bitcoin for his electric vehicles played a part. Lastly, the excess risk of crypto traders weighed heavily in this equation.

ETFs Investment Cut Short by the SEC

The Ark Investment announcement comes after a similar one by the Amplify Transformational Data Sharing ETF (BLOK). It is a $1.3 billion blockchain-focused product. Last week, reports found it to have a tiny stake in three Canadian Bitcoin ETFs.

Investors and issuers are waiting for regulators to approve exchange-traded products in the U.S. Canada and Europe are way ahead with more applications piling with the SEC.

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Ark Investment is also in line. They have teamed up with 21Shares AG, based in Switzerland, to file plans for a U.S. fund. SEC delayed the approval of the first Bitcoin ETF again last week. The newest move comes from SEC President Gary Gensler asking for additional regulation and protection for the bitcoin exchange.