Wood’s ARK, 21Shares Again Seek Spot Bitcoin ETF

Cathie Wood’s ARK Investment Management and Swiss fund issuer 21Shares are again making their case to issue a spot bitcoin exchange-traded fund, with their third attempt focusing on how their product would be safer for investors after last year’s crypto debacles. 

The proposed ARK 21Shares Bitcoin ETF would track the performance of the S&P Bitcoin Index, which has gained 65% so far this year. ARK would be charged with helping to market the fund, according to a filing. 21Shares manages bitcoin ETFs trading on European exchanges and presumably would use its knowledge gleaned from that experience. 

The filing follows numerous efforts to issue a spot bitcoin ETF in the U.S., where regulators skeptically view issuers’ abilities to safeguard against fraud. The highest-profile effort to date has been Grayscale Investments’ request to convert its $17.2 billion Grayscale Bitcoin Trust, which invests in pools of trusts that hold bitcoin. That effort was rejected by the Securities and Exchange Commission and is currently the subject of a lawsuit between the parties.  

“Here we go again,” Bloomberg ETF analyst Eric Balchunas tweeted. “First one in the ring in what is like the 8th round of this race going on 10yrs.” 

The ARK/21Shares’ effort takes into account those regulatory concerns and focuses on safety. Cryptomarkets tanked in 2022, while investors also endured spectacular flameouts of crypto heavy hitters like FTX, Terraform Labs and Voyager, and the collapse of cryptocurrency lender BlockFi. 

Not having a spot bitcoin ETF pushes investors into taking unnecessarily high risks, the filing stated. It proposes giving investors access to something with a “transparent, regulated, and well-understood structure.”  

“To this point, approval of a Spot Bitcoin ETP would represent a major win for the protection of U.S. investors in the cryptoasset space,” the filing said. 

The companies first attempted to issue a spot ETF in June 2021 and again last may. Wood is a 21Shares board member.

Coinbase Global Inc. would be custodian of the trust’s bitcoin. 

21Shares Chief Executive Officer Hany Rashwan wrote in an email that the company wishes to offer a product in the U.S. that investors in other parts of the world have had for some time.

"A spot BTC ETF remains one of the safest and most reliable ways to invest in bitcoin," he wrote, citing "the regulated nature of the product, the insolvency and cybersecurity protections from segregated institutional custody, and the ability to purchase shares via a standard brokerage account."

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