Cathie Wood's Ark Investments Submits Bitcoin ETF Application to the US SEC

On Monday, Eastern Time, Ark Investment Management, led by Cathie Wood, and 21Shares AG, an exchange-traded product (ETP) issuer based in Zug, submitted a joint application to the U.S. Securities and Exchange Commission (SEC) to launch the Bitcoin exchange-traded fund "ARK 21Shares Bitcoin ETF."

The document shows: "21Shares US LLC is the sponsor of the trust, Delaware Trust Company is the trustee of the trust, Coinbase Custody Trust Company, LLC is the custodian of the trust and will hold all of the trust's bitcoin on behalf of the trust. ARK Investment Management LLC provides assistance in stock marketing."

If approved, the ETF would trade on the Cboe BZX exchange and would track the price of bitcoin using the S&P Bitcoin Index.

The Trust is an exchange-traded fund (ETF). Except in the event of liquidation or special circumstances, the Trust does not intend to buy or sell Bitcoin directly, although the Custodian may be directed to transfer or sell Bitcoin to pay certain expenses. Instead, when the Trust sells or redeems its shares, it will do so "in kind" in units of 5,000 shares.

Financial companies authorized to purchase or redeem shares from the Trust (referred to as "Authorized Participants") will deliver or facilitate the delivery of Bitcoin to the Trust's account at the Custodian in exchange for shares when purchasing shares, and the Trust will deliver Bitcoin to such Authorized Participants through the Custodian when redeeming shares. Authorized Participants may then offer shares to the public based on a variety of factors, including the supply and demand for the shares, the value of the Trust's assets, and market conditions at the time of the transaction.

In early May, Cathie Wood was appointed to the board of directors of Amun Holdings, the owner of 21Shares. This is already the twelfth ETF application in the United States. Companies such as Fidelity, Galaxy Digital and VanEck have joined the competition. Ark currently owns about $250 million in Grayscale Bitcoin Trust shares.

Wood, a long-time cryptocurrency bull, said in a recent interview with Bloomberg TV that Bitcoin is “selling off right now” but hasn’t necessarily hit bottom. Wood still expects Bitcoin to hit $500,000.

Fidelity, VanEck, Skybridge and Galaxy Digital have all filed similar applications in recent months. The SEC earlier this month delayed its decision on whether to approve VanEck's bitcoin ETF application and asked the parties involved to provide further comments on how the bitcoin ETF would affect the broader market.

The filing comes as Ark begins to reverse a turbulent few months. The Ark Innovation ETF (ARKK) has resumed inflows and is up 26% since its May low. Wood’s other products are also gaining steam. So far this year, the Ark Autonomous Technology & Robotics (ARKQ) is up 12.5%, and the Ark Fintech Innovation ETF (ARKF) is up 8%.

While many hoped that SEC Chairman Gary Gensler would take a more favorable approach toward cryptocurrencies, little appears to have changed since he took on the role in April.

The SEC has been blocking all cryptocurrency ETF applications citing security and pricing issues, which can be difficult given the 24/7 trading cycle of digital assets and their overall volatility. Despite this, companies have not stopped submitting applications. This year alone, Fidelity has applied for the Wise Origin Bitcoin Trust, Goldman Sachs has filed forms for cryptocurrency-related products, and Grayscale has emphasized their commitment to converting the Grayscale Bitcoin Trust into an ETF as soon as possible.