ARK Invest, the New York-based investment management firm led by Cathie Wood, filed for a Bitcoin ETF last week. With this move, the firm joins several other US firms that hope to persuade the Securities and Exchange Commission (SEC) to allow the launch.
However, ARK Invest’s application has one feature that stands out in the ever-increasing field. According to a report by the Financial Times, the firm was the first to disclose a “real fee” for its proposed Bitcoin ETF offering.
According to a disclosure form submitted to the SEC, ARK Invest has partnered with Switzerland-based ETF provider 21Shares AG to offer the ARK 21Shares Bitcoin ETF. If approved, the ETF will trade on Cboe’s BZX Exchange under the ticker symbol ARKB.
Neena Mishra, director of ETF research at Zacks Investment Research, told the FT that since Ark’s proposed Bitcoin ETF already has a large market, this means competitors will want to match or reduce expenses by starting a “fee war”.
Both Ark’s Innovation and Next Generation Internet ETFs own shares of crypto exchange Coinbase, which was acquired to provide custody services for the proposed Bitcoin ETF. According to Mishra, if the proposal is approved, it will mean that both funds will become major shareholders, with investors free exposure to the product.
The ETF is also an investor in the Grayscale Bitcoin Trust (GBTC).
What is a Bitcoin ETF?
An exchange-traded fund operates as a publicly traded fund that tracks the price of the underlying asset. In the case of a Bitcoin ETF, it gives institutional investors exposure to Bitcoin without the need to physically purchase the asset.
Bitcoin ETFs are already available to investors in countries like Canada and Brazil. However, their American counterparts are still waiting for the product to arrive, as the SEC has so far turned down all applications.
Currently, the Commission is reviewing Bitcoin ETF applications from firms such as Kryptoin, WisdomTree, VanEck, Fidelity and Skybridge Capital, while both WisdomTree and VanEck have filed for Ethereum ETFs.