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ARK Invest Preparing to Launch Bitcoin ETF

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Everything went great for bitcoin in the first half of 2021, with the constant corporate support. The cryptocurrency, infamous for its high volatility, crossed the $58,350 mark on Feb 21, only to slip later on. But the currency jumped back above $50,000 on Feb 23, thanks to supportive comments from Ark Investment Management’s Cathie Wood and Square’s (SQ) purchase of bitcoin (read: Is ARK ETFs' Stellar Journey Over?).

The cryptocurrency touched $60,000 on Mar 14. The asset also hit an all-time high of nearly $65,000 in April on the Coinbase IPO success. However, the winning cryptocurrency then started losing its appeal. Though bitcoin slumped below the $50,000 level for the first since Mar 8 on U.S. President Joe Biden’s plan to hike capital gain tax and Bitcoin (BTC) dominance fell that time below the 50% mark for the first time since 2018, interest from the bitcoin ETF issuers is still intact.

Inside Cathie Wood’s Filing

According to a recent filing, ARK Invest’s Cathie Wood has joined hands with 21Shares to offer the ARK 21Shares Bitcoin ETF, which would trade under the ticker symbol “ARKB,” if at all approved. The bitcoin  ETF would list on the Cboe Global Markets and would track the S&P Bitcoin Index as its benchmark, per a MarketWatch article.

Other Filings

Not only Wood, VanEck had filed an application with the SEC this year. But the regulator has extended its review period of the VanEck bid in June by 45 days for the second time.

Notably, the SEC had earlier rejected several bitcoin ETF proposals. VanEck had previously filed for the bitcoin ETF, withdrawing its most recent application in September 2019. That was not the first time that VanEck has attempted to launch a bitcoin ETF. In mid-2018, the company had collaborated with blockchain company SolidX.

The plan was to make the product physical and not futures based, i.e. comprising actual bitcoin, which will be “insured against any loss or theft.” However, it failed to amass SEC’s trust as the regulatory body postponed its ruling on the fund (read: Yet Another SEC Disapproval for Bitcoin ETF: What Next?).”

Before that, SolidX’s proposal of a physically backed bitcoin ETF was dismissed by the Securities and Exchange Commission in March 2017 and VanEck  withdrew its application for a futures-based bitcoin ETF in January 2018.

What’s Keeping SEC From Giving Its Nod?

SEC is worried about extreme price volatility in cryptocurrencies and liquidity in bitcoin-related funds. The market is pretty unregulated at the current level.

Any ETF Alternatives to Play Bitcoin?

Though bitcoin ETFs are not available to investors, they have blockchain ETFs at their disposal. Per a source, “the blockchain in Bitcoin literally acts a ledger; it keeps track of the balances for all users and updates them as money changes hands.”

So, if investors cannot lay their hands on a bitcoin ETF now, they can definitely familiarize themselves with the concept through blockchain ETFs like like Amplify Transformational Data Sharing ETF (BLOK - Free Report) . Then there is Bitwise Crypto Industry Innovators ETF (BITQ - Free Report) to play the strength of the currency.

Bitcoin mining is now easier and more profitable as algorithm adjusts after China crackdown, per a CNBC article.Funds like VanEck Vectors Digital Transformation ETF (DAPP - Free Report) , Simplify Volt Fintech Disruption ETF (VFIN) can also give you an exposure to bitcoin (read: Bitcoin Matches SPY ETF in 1H: What Lies in 2H of 2021?).

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