Ark Invest, an asset management company founded by Cathie Wood and a crypto enthusiast, wants to accelerate its crypto strategy. It has officially lent its name for an ETF tracking Bitcoin futures.
A bitcoin token is not the same thing as a future bitcoin. The futures contract holder does not hold the cryptocurrency, but the rights to a contract between the parties to purchase an asset in future at a price that is determined in the present.
rk Invest believes in a US-Regulated Crypto ETF
Bloomberg reports that Ark Invest has joined the race of institutions applying for a cryptocurrency ETF. The ARK 21Shares Bitcoin Futures Strategy ETF ticker ARKA will invest in Bitcoin futures and not the cryptocurrency itself. This could help facilitate its approval, as Gary Gensler recently stated.
Futures markets are more volatile than other markets, but they have the advantage that participants don’t have to protect assets. This is a regulatory and financial advantage because there is more clarity in the rules. Every futures contract is regulated completely by the CFTC.
Ark Invest’s latest filing shows that the fund invests in ETFs for bitcoin futures, which are properly regulated by the United States.
The Fund is an exchange-traded fund (“ETF”) actively managed that invests in bitcoin futures contracts. These contracts are cash-settled with U.S. Dollars and traded on or subject to the rules, registered commodity exchanges with the Commodity Futures Trading Commission (“CFTC”) such as the Chicago Mercantile Exchange (“CME”) (“Bitcoin Futures”) (or any other exchanges). The Fund does NOT invest in bitcoin or any other digital assets.
This is a significant step forward for the American market, given that Ark Invest had already turned its attention to the crypto-friendly Canadian markets.
It is pushing the gas on its crypto strategy
According to the SEC, an additional Ark Invest EFT (ARK Next Generation Internet ETF) is able in Canadian Crypto ETFs and the Grayscale Bitcoin Investment Trust (“GBTC”) according to the SEC. Although not an ETF, the latter is a U.S.-regulated product which allows indirect exposure to Bitcoin’s price by buying shares in a trust that holds large amounts (approximately 33% of all coins currently in circulation).
The emerging asset class of cryptocurrency is cryptocurrency. There are many cryptocurrencies available, but bitcoin is the most popular. A fund could be exposed to bitcoin indirectly by investing in the Bitcoin Investment Trust (“GBTC”) a privately-offered, open-end investment vehicle that invests only in bitcoin.
The fund is also exposed to companies that have significant investments in Bitcoin or are otherwise involved in cryptocurrency. The ETF invests on shares of Coinbase, the first US-regulated crypto exchange, Tesla. It is owned by Elon Musk, a crypto enthusiast. Square, the crypto-friendly payment processor, was founded by Jack Dorsey (Bitcoin maximalist, co-founder of Twitter). It holds more than 8000 BTC.
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