ARK Invest, in partnership with 21Shares, has filed applications for two new exchange-traded funds (ETFs) focused on cryptocurrency futures, according to a preliminary prospectus dated Aug. 24.
One of these ETFs will be solely invested in Ethereum futures, with the ticker symbol ARKZ. The other, sporting the ticker symbol ARKY, will include both Bitcoin and Ethereum futures. These applications have been filed with the U.S. Securities and Exchange Commission (SEC) and are pending approval.
The objective of these actively managed ETFs is long-term capital appreciation. According to the prospectus, ARK 21Shares Active Ethereum Futures ETF, or ARKZ, will invest in standardized, exchange-traded Ether futures contracts that are cash-settled in U.S. dollars.
Alex DovbnyaThese contracts are regulated by the Commodity Futures Trading Commission (CFTC) and are likely to be traded on exchanges like the Chicago Mercantile Exchange (CME).
It's worth noting that these funds will not invest directly in cryptocurrencies but will instead seek exposure through futures contracts.
It's important to note that the funds do not offer direct exposure to "spot" prices of Ethereum or Bitcoin, and therefore might not fully capture the volatility or potential upside of the underlying assets.
These investment products also come with inherent risks such as "contango" and "backwardation," which could affect pricing and erode returns.
The SEC’s approval or disapproval of these ETF applications will be closely watched. As reported by U.Today, the regulator is gearing up to greenlight a host of cryptocurrency ETFs.
Dan Burgin
Vladislav Sopov