Cathie Wood’s Ark Throws its Hat in the Bitcoin Futures ETF Ring, Valkyrie Updates Prospectus for Potential Approval This Month
Cathie Wood had joined the race of Bitcoin Futures exchange-traded fund (ETF) with its ARK 21Shares Bitcoin Futures Strategy ETF (ARKA).
The ETF plans to invest Bitcoin futures contracts on commodity exchanges, according to a filing with the Securities and Exchange Commission (SEC).
Alpha Architect, an issuer of ETFs, submitted the filing with Switzerland-based 21Shares AG’s US affiliate listed as the sub-advisor. Ark Investment will provide marketing support for the sub-advisor.
“It’s a no brainer for Ark because they will likely be able to instantly seed it with about half a billion that they currently have in GBTC,” said Eric Balchunas, a senior ETF analyst for Bloomberg Intelligence.
“Ark also has a strong base of younger investors who probably would use this as well. Closest thing to a surefire hit as you’ll see.”
Ark Investment has already given its name for the physically-backed ETF — ARK 21Shares Bitcoin ETF (ARKB) that would track the performance of the leading cryptocurrency as measured by the S&P Bitcoin Index, according to a June filing.
But all the attempts to get a physically-backed Bitcoin ETF since 2013 have failed so far, with the SEC rejecting every one of them. The hope for a Bitcoin ETF has rejoiced this month due to SEC Chair Gary Gensler hinting his support for a futures-backed ETF that offers greater investor protection for months now.
The optimism around the Bitcoin ETF approval is what’s driving the Bitcoin price action right now, which has surged to its highest level since May. Open interest on Bitcoin futures at CME has also hit a new ATH.
Market mainly trading a BTC futures ETF approval pic.twitter.com/MT1rgnqXFZ
— Alex Krüger (@krugermacro) October 14, 2021
Ever since Gensler announced that he would be more open to approving an ETF submitted under the Investment company Act of 1940, nine Bitcoin futures ETF applications have been filed so far.
Everyone in the crypto industry is now eagerly awaiting October 18th, the day the SEC has to decide on ProShares Bitcoin Strategy ETF.
“No news from SEC over the next week is a positive for a potential ETF launch in our view,” said James Seyffart, ETF analyst at Bloomberg Intelligence.
However, only three filings are limited to futures, including Valkyrie Bitcoin Strategy ETF, whose deadline is on October 25th, BlockFi Bitcoin Strategy ETF, whose deadline doesn't come until the end of the year on December 22nd, five days later, Ark21 SharesBitcoin Futures Strategy ETF.
Ark’s filing is actually the second one after Valkyrie that doesn’t seek to invest in Canadian-listed funds that provide exposure to bitcoin. Bloomberg’s Balchunas said the rumor is that SEC “wants them to be strictly futures,” which puts Valkyrie’s chance of getting an approval higher than ProShares.
On Wednesday, Valkyrie also updated their bitcoin futures ETF to add the ticker BTF, but information on fees still hasn't been added. These types of updated prospectus filings, Balchunas said, “typically only happens when ducks in row ready for launch.”