Cathie Wood Adds Canadian Bitcoin ETF Exposure to Internet ARK Fund

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Cathie Wood has added a new way to invest in cryptocurrency to one of her ARK Investment Management ETFs.

The $ 5.7 billion ARK Next Generation Internet ETF (ARKW) can now invest in Canadian bitcoin ETFs, according to a recent filing with the Securities and Exchange Commission (SEC).

While the United States does not have a bitcoin or cryptocurrency ETFs, Canadian regulators north of the border have approved a number of these strategies.

At least four Canadian Bitcoin ETFs were launched this year: the C $ 1.2 billion (US $ 1 billion) Purpose Bitcoin ETF (BTCC), the C $ 108.5 million (EBIT) Evolve Bitcoin ETF , the C $ 349 million CI Galaxy Bitcoin ETF (BTCX) and the C $ 746 million Bitcoin 3iQ CoinShares ETF (BTCQ).

ARKW was already a large investor in bitcoin, accessing cryptocurrency through the Grayscale Bitcoin Trust (GBTC), a position it increased during 2021. In January, GBTC was the third largest stake in the ETF at 4.7% of assets. It is now the fund’s second position, behind Tesla, at 5.5%.

“ARK’s move to a Canadian bitcoin ETF is likely to benefit from the liquidity it provides and its ability to significantly eliminate the discounts and bonuses that Greyscale’s product regularly incurs,” said Todd Rosenbluth, director of research on ETFs and mutual funds for CFRA. “As a company looking to launch their own bitcoin ETF, it’s ironic that ARK can own one in a different market.”

ARK has partnered with Swiss crypto store 21Shares to lend its names to the company’s ARK 21Shares Bitcoin ETF, which Wood’s asset manager will help market, if approved by the SEC.

Wood is an outspoken bitcoin bull. Last week, she told Yahoo Finance, “It’s more than just a store of value or“ digital gold. ”Bitcoin in particular is a new global monetary system. She went on to describe crypto -money as “a hedge against the whims of policymakers, especially in emerging markets”.

Despite this position, it has no direct exposure to the cryptocurrency through its flagship $ 25.5 billion ETF ARK Innovation (ARKK). ARKK previously owned Grayscale, allocating 1% of the assets to the cryptocurrency in 2015 when it was priced at $ 250, but sold out in 2018. In an interview with Bloomberg in December 2020, Wood said that the company was forced to sell when the position reached 10.% of the fund, citing the tax treatment of gains from unqualified income and the Law 40 rules. In the same 2020 interview, she said that in portfolios The company’s fully discretionary, which is not subject to the rules of Law 40, its bitcoin position was around 7%. “That’s how optimistic we are about it,” she said.

ARKK has indirect exposure to bitcoin through a number of investments, including Tesla and Square, which both hold the cryptocurrency on their balance sheets, and the Coinbase crypto exchange. The latter is ARKK’s fourth largest stake at 4.67% and ARKW’s sixth largest stake at 4.6%.

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