Cathie Wood’s ARK Invest has submitted registration statements for two index crypto ETFs, tracking the CoinDesk 20 index. One of them provides exposure to Bitcoin alongside altcoins such as ETH, SOL, XRP, and ADA, while the other simply focuses on these altcoins and excludes the flagship crypto and Bitcoin Cash.
Ark Invest Files S-1 For CoinDesk 20 Crypto ETF
An SEC filing shows that the asset manager has filed an S-1 for the ‘ARK CoinDesk 20 Crypto ETF,’ which will track the daily performance of the CoinDesk 20 index. This Index consists of BTC, ETH, XRP, SOL, ADA, LINK, XLM, BCH, SUI, AVAX, LTC, HBAR, CRO, UNI, AAVE, NEAR, APT, POL, ICP, and DOT.
Ark Invest plans to list this crypto ETF on the NYSE Arca. To achieve the fund’s objective, Ark Invest stated that the Trust will invest in the Index Futures and will hold its remaining assets in cash and cash equivalents. The Index Futures are futures contracts that reference the Index and are traded on the ICE Futures.
Basically, the fund won’t provide spot exposure to these crypto assets as it will focus on investing in regulated futures contracts that track this Index. This differs from other index-based funds, such as the Franklin Templeton Crypto Index ETF, which tracks BTC, ETH, XRP, SOL, DOGE, ADA, XLM, and LINK and offers spot exposure to these coins.
It is also worth noting that Ark Invest isn’t the first to file for a crypto ETF that tracks the CoinDesk 20 index. In November last year, WisdomTree filed to offer a fund that also tracks the Index. However, unlike the ARK CoinDesk 20 Crypto ETF, WisdomTree’s fund will directly invest in the crypto assets in the Index, with the same weights as they hold in the Index.
The Bitcoin-Exclusive CoinDesk 20 ETF
Ark Invest also filed an S-1 form for the ‘ARK CoinDesk 20 ex-Bitcoin Crypto ETF.’ This fund differs from the ARK CoinDesk 20 Crypto ETF as it tracks the Index’s daily performance, excluding the bitcoin-related constituents of the Index.
The asset manager also plans to list this fund on the NYSE Arca. Meanwhile, to achieve the fund’s objective, the firm will primarily take long positions in CoinDesk 20 Index futures contracts and short positions in CME Bitcoin Futures, thereby eliminating the portion of the Index’s performance attributable to the BTC or BCH price.
Just like the ARK CoinDesk 20 Crypto ETF, this fund does not offer spot exposure to these crypto assets, as it focuses on futures markets. However, the fund may have indirect exposure to these crypto assets through its investments in futures positions.
Notably, the filing comes on the same day that Grayscale filed its S-1 for a Binance Coin (BNB) ETF. Grayscale already offers a crypto index ETF, though the fund tracks only the CoinDesk 5 index.
Ark Invest already offers a Bitcoin ETF. However, these two crypto index ETFs would be the first to focus on other crypto assets besides the flagship crypto.
Source: https://coingape.com/cathie-woods-ark-invest-files-for-btc-eth-sol-xrp-ada-index-crypto-etf/
