The growing popularity of bitcoins as an investment tool, which sometimes becomes higher than the frequency of its use as a digital means of payment led to the creation of several financial products on the basis of the digital currency. Among them – a characteristic product for the traditional financial markets exchange-traded Fund (ETF) that allows investors to track and invest in multiple assets through a single product.
Likewise, bitcoin ETF allows institutional investors to benefit from price movements the world’s largest cryptocurrency without owning bitcoin. The offer proved popular in Sweden and Germany, where investors can invest in derivatives of a digital asset. Nevertheless, the us ETF on the basis of the digital assets cannot boast the same success.
Futures BTC from the Ark has lost its charm
In April of this year offer contracts on bitcoin (ARKK) from Ark Innovation was called the «ETF of the year». The company was true to its promise to provide access to the revolutionary digital assets and often ranked first in the number of available BTC. Moreover, the distribution of bitcoins of the company ARKK always ranged from 6 to 10 percent.
Currently only ARK Web x.0 ETF (ARKW) competes with ARKK, while the company received a huge profit in 2017. The Bitcoin Investment Trust (GBTC), which was used for access to bitcoin, was the main factor of income growth for both funds last year. ARKK and ARKW increased by more than 87% in 2017, and GBTC — 1550%.
However, due to recent bitcoin price drops, it starts to leave the center of attention ARKK and ARKW – share digital currency now accounts for only 0.5% and 0.6% of their indicators, respectively. According to reports, the percent reduction of bitcoin in these companies began earlier this year and can be associated with an increase in tax obligations and more stringent regulation.
Another factor that contributed to this state of Affairs was the decline of the cryptocurrency market in General, after December 2017 bitcoin set a price record almost reached the cost of $ 20,000 per coin.
However, if the performance of GBTC will increase in the coming months, any improvement of the value of bitcoin will affect the distribution of securities of the Fund. ARK, of course, profited from its former distribution, and the decrease in income began only when the value of the cryptocurrency began to fall.
In 2015, the ARK Invest became the first
exchange-traded Fund, which started investing in bitcoin. Since the development of cryptocurrency ETF were not in place and for the most part was in the struggle of the companies with the Commission on securities and stock exchanges of the USA. At the beginning of this year, the SEC forced
three companies to withdraw the application for a Bitcoin ETF, and around the same time the new York stock exchange registered
several ETFs on indices bitcoin. However, the main issue of concern to the cryptocurrency community will allow
whether the SEC this year Bitcoin ETF, remains unanswered.
With ETF blockchain, things are a little better At the beginning of this year, the regulator of Canada approved
the launch of the first ETF blockchain-companies and around the same time, the first ETF to blockchain was launched
on the Nasdaq and NYSE.