A tech-focused exchange-traded fund (ETF) managed by ARK Investment Management has added bitcoin to its holdings, through its purchase of shares in Bitcoin Investment Trust (BIT).
BIT, publicly traded as GBTC on the US OTC Markets, debuted for trade in May. Each share represents one tenth of a bitcoin. Shares have traded at a premium to the value of their underlying bitcoin since inception, possibly a result of low secondary supply or the perceived safety of a regulated fund. Bitcoin currently trades near $230, while GBTC last closed at $29.99, representing a 30% premium. The gap had closed to as low as 18% during a bout of late August volatility.
The ARK Web x.0 ETF (NYSEArca: ARKW) is now composed of 0.27% GBTC. The fund’s market value is roughly $12 million; it purchased roughly $32,000 worth of the shares.
eToro’s Dylan Holman on Introducing Bitcoin to the Premier LeagueGo to article >>
The ARK Web x.0 ETF invests heavily in technology stocks. Its top holdings are Athenahealth and LinkedIn, with other sizeable stakes in Apple, Amazon, Netflix and Facebook. It has placed a recent focus on disruptive technology, a common descriptor for Bitcoin.
The fund’s general philosophy is that the bull market will continue, with technology leading the way to yield value and returns. “Innovation is inevitable, and truth ultimately wins out in the equity market” is one of the firm’s slogans.
Bitcoin has become one of its interests, the firm producing two research papers on the topic during the last seven days. And while much of the mainstream financial community favors Bitcoin for its technology over the currency, ARK sees it differently. “We’re believers in bitcoin, the currency, and Bitcoin, the technology platform. We also believe that current prices present an attractive entry point for our investors,” said ARK’s Founder and Chief Investment Officer Cathie Wood.
Since launching roughly one year ago, shares of ARK Web x.0 have gained 10%.