CEO of ARK Investment Management, Cathie Wood made some bullish comments about Bitcoin on Bloomberg earlier today. She believes that it’s only a matter of time before an Exchange Traded Fund is approved but we should expect to see closed-end funds much sooner.
I wouldn’t be surprised if we saw a closed-end fund before a bitcoin ETF. I don’t think we’ll see an ETF within a year, but maybe within two years and with a lot of education.
Wood cites the lack of knowledge surrounding cryptocurrency as the main barrier to the first Exchange Traded Fund. She also highlights the necessity of regulation within the space. Believing Bitcoin to be a financial security, she holds that the responsibility for legislating will lie with the SEC.
The US Securities Exchange Commission have already knocked back multiple attempts at setting up a strictly crypto ETF. In March this year, two high profile efforts by the Winkelevoss Twins got turned down. The reasoning cited was that the market was too unregulated, and there were insufficient surveillance-sharing agreements between exchanges. It’s expected that once the green-light is finally given for a crypto ETF, a lot of money will pour in. Bloomberg’s Eric Balchunas said the approval of an ETF for something was “getting it ready for prime time” and that it was “good for bitcoin because it’s going to open up a world of new investors.”
In the piece for Bloomberg, Wood also addressed the now infamous comments Jamie Dimon made last month. Responding to the JP Morgan Chase CEO calling Bitcoin a “fraud”, she said:
Jamie is talking about store of value. I actually think this [Bitcoin] has a lot over fiat currencies.
Finally, the ARK exec spoke about the recent interest Goldmach Sachs had expressed in cryptocurrencies. She was optimistic of the legitimacy they’d lend to the space, which would translate into greater liquidity, and a more appealing ecosystem within which a crypto ETF could be launced.
If they start trading in cryptoassets and developing futures and derivatives that is only going to make the ecosystem stronger, which is what the SEC is looking for.
At present, Wood’s ARK Innovation Exchange Traded Fund allows clients some exposure to cryptocurrency. It acquires these through the Bitcoin Investment Trust which are the “first publicly quoted securities solely invested in and deriving value from the price of Bitcoin”. The ARK Innovation ETF focuses primarily on disruptive, and innovative technologies. It’s only natural, therefore, that Bitcoin would have a place within the securities offered there.