Cathie Wood’s ARK Invest Seeks Approval For Two Crypto Index ETFs

TLDR

• ARK Invest files for two crypto ETFs that track the CoinDesk 20 index, excluding direct token ownership.
• One of the proposed ETFs will exclude bitcoin by using futures contracts on the CoinDesk 20 index.
• The proposed ETFs aim to provide diversified exposure to crypto assets like bitcoin, ether, and solana.
• ARK Invest’s filings follow similar efforts by WisdomTree and ProShares for crypto index ETFs.

Cathie Wood’s ARK Invest has filed with U.S. regulators to launch two new cryptocurrency exchange-traded funds (ETFs). These funds will track the CoinDesk 20 index, which measures the performance of the most liquid digital assets. The aim is to offer investors exposure to major cryptocurrencies like bitcoin, ether, and solana, without requiring them to directly hold the tokens.

The filing reflects ARK Invest’s continued push into the cryptocurrency market, expanding beyond its spot bitcoin ETF. The proposed ETFs would rely on regulated futures contracts to track the CoinDesk 20 index. This would allow the funds to follow the index’s daily movements without holding cryptocurrencies directly, a method that can help simplify the process for investors.

Two ETFs Focused on Crypto Exposure

The two proposed ETFs will have different strategies to track the CoinDesk 20 index. The first fund will mirror the CoinDesk 20’s exact performance, providing broad exposure to the top liquid digital assets. These assets include widely recognized cryptocurrencies such as bitcoin, ether, solana, and XRP.

The second ETF will exclude bitcoin. This fund will track the CoinDesk 20 index while using a strategy that pairs long index futures with short bitcoin futures. This approach could provide investors exposure to the broader crypto market without direct involvement in bitcoin. The two funds are intended to meet different investment needs, allowing for diverse crypto market exposure without owning tokens.

Focus on Diversified Crypto Exposure

The primary goal of the proposed ETFs is to offer diversified exposure to the cryptocurrency market while avoiding the challenges of token custody. Investors can gain exposure to a variety of digital assets, including major coins like Cardano, without the complexities that come with directly holding the assets. With crypto assets being volatile, these ETFs aim to provide a regulated investment option that tracks an established index of digital assets.

Both funds would list on the NYSE Arca, the exchange known for listing various exchange-traded products. However, the NYSE Arca has not yet submitted a 19b-4 form to the Securities and Exchange Commission (SEC), a necessary step before the filing can be finalized. If approved, these ETFs could serve as a new entry point for institutional and retail investors seeking regulated exposure to the cryptocurrency space.

ARK Invest Joins Other Firms in Pursuing Crypto ETFs

ARK Invest’s move follows similar filings by other asset managers like WisdomTree and ProShares, who have also proposed crypto index ETFs based on regulated futures. These proposals reflect growing interest in cryptocurrency-related financial products. However, none of these ETF filings have been approved by the SEC yet, meaning there is still no clear path for these funds to reach the market.

ARK’s filings indicate a clear shift toward more diversified crypto investments. While the firm has already gained attention with its spot bitcoin ETF, these new filings could allow ARK to expand its crypto-related offerings and provide investors with a broader range of investment options in the digital asset space. The introduction of these ETFs could pave the way for more investment in the growing crypto sector, particularly as institutional interest continues to increase.

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