- Ark Invest and 21Shares are set to launch five new crypto ETFs next week, focusing on bitcoin and ether futures.
- These ETFs, which are actively managed, include the ARK 21Shares Active Bitcoin Ethereum Strategy ETF and the Active On-Chain Bitcoin Strategy ETF.
- The launch comes amidst a waiting period for the approval of proposed spot bitcoin and ether ETFs by the U.S. Securities and Exchange Commission.
Ark Invest and 21Shares are set to introduce a new suite of crypto ETFs next week, which will be a huge step for the cryptocurrency sector.
These funds, which specialize on bitcoin and ether futures, represent a significant increase in the number of crypto investment products available to investors.
While planned spot Bitcoin and Ethereum ETFs await approval, Ark Invest and 21Shares are taking a step forward by offering these actively managed funds, possibly changing the crypto ETF market and attracting a broader investor base.
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A New Class of Crypto ETFs Is Being Introduced
Ark Invest and 21Shares have announced the creation of five new funds that will invest in bitcoin futures contracts, ether futures, or a mix of the two.
These funds, which the firms filed jointly in August, are set to debut on Tuesday and Wednesday, boosting the current offerings in the crypto ETF industry.
Despite the fact that Ark and 21Shares are new to the market, having launched bitcoin futures ETFs in October 2021 and ether futures funds this month, their active management style distinguishes them.
The ARK 21Shares Active Bitcoin Ethereum Strategy ETF is one of the standout offerings in this new portfolio.
This fund seeks to outperform direct bitcoin holdings across a market cycle by allocating to both BTC futures and ETH futures, leveraging historical pricing connections and fundamental analysis.
Another fund, the Active On-Chain Bitcoin Strategy ETF, invests in bitcoin futures and cash equivalents, using on-chain pricing algorithms in part.
A fifth fund in the suite will also mix BTC futures with a concentrated portfolio of crypto-related shares, providing a varied investment approach in the digital asset space.
Differentiating in a Crowded Market
Despite entering an already saturated market, Ark Invest and 21Shares are confident in their ability to differentiate their products by leveraging their experience in both traditional finance and decentralized financing (DeFi).
Ophelia Snyder, president of 21.co, stated that the company intends to cater to a wide range of investors, from crypto veterans to newbies.
This extensive array of solutions is intended to give many entry points into the cryptocurrency investment field, catering to varied risk profiles and investment strategies.
However, Neena Mishra, director of ETF research at Zacks Investment Research, noted that it is difficult to predict the exact demand for these new products.
The success of these new funds remains unknown, with the crypto community anxiously awaiting spot ETFs and a lukewarm reception to ether futures ETFs.
Despite this, recent patterns show an increase in investor interest in futures-based funds, with the ProShares Bitcoin Strategy ETF (BITO) seeing considerable net inflows in the last month.
The Road Ahead for Crypto ETFs
The introduction of these ETFs by Ark Invest and 21Shares comes as the Securities and Exchange Commission prepares to rule on their spot bitcoin ETF proposal by January 10, with a spot ether proposal also under consideration.
These trends imply that mainstream financial markets are becoming more interested in and accepting of crypto-based investment products. During a weak market, Snyder also stressed the potential underestimation of the value and hunger for crypto offers.
With bitcoin (BTC) and ether (ETH) values rising significantly in the last week, there is reason to be optimistic about these new ETFs.
Mishra, on the other hand, said that it remains to be seen whether new ETFs can use active management and proprietary trend indicators to outperform existing bitcoin and ether-based products.
The impending introduction of crypto ETFs from Ark Invest and 21Shares marks a watershed moment in the growth of cryptocurrency investment products.
As the market matures, these ETFs provide additional opportunities for investors to obtain exposure to digital assets, potentially opening the path for larger institutional acceptance and integration of cryptocurrencies into diverse investment portfolios.
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