Cathie Wood's ARK Invest has filed with the US Securities and Exchange Commission on June 18 to create a bitcoin exchange-traded fund (ETF). Ark Invest has partnered with 21Shares to launch the ETF.
The ETF’s investment objective is to track the performance of bitcoin, the firm said in the SEC filing. If approved, the fund would trade under the ticker symbol "ARKB".
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The SEC is yet to approve a bitcoin ETF.
Under a header titled 'Risk Factors', Ark Invest acknowledged the volatility associated with the cryptocurrency.
"Bitcoin has a relatively limited history of existence and operations compared to traditional commodities. There is a limited established performance record for the price of bitcoin and, in turn, a limited basis for evaluating an investment in bitcoin," it said.
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The firm also noted that the market value of bitcoin is not related to any specific company, government or asset.
"The valuation of bitcoin depends on future expectations for the value of the Bitcoin network, the number of bitcoin transactions, and the overall usage of bitcoin as an asset. This means that a significant amount of the value of bitcoin is speculative, which could lead to increased volatility. Investors could experience significant gains, losses and/or volatility in the Trust’s holdings, depending on the valuation of bitcoin," ARK Invest said in the filing.
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As per a Reuters report, Wood's ARK Innovation fund owns around $820 million worth of shares in cryptocurrency exchange Coinbase Global, making it the fund's 10th largest holding.
Bitcoin tumbled in recent days to a two-week low as China's expanding crackdown on bitcoin mining made investors more uncertain about the future of the leading cryptocurrency. Bitcoin on June 29 traded at about $34,723, compared to its April peak of nearly $65,000.