Cathie Wood’s Ark Invest has submitted applications for various new Bitcoin ETFs, featuring both yield-generating and downside-buffered options.
Summary
- Ark Invest has proposed multiple new Bitcoin ETFs to the U.S. SEC
- Filings include the Bitcoin Yield ETF and ARK DIET Bitcoin 1 & 2 ETFs
- Investor concerns regarding downside risks for BTC are growing
Cathie Wood’s Ark Invest is reinforcing its commitment to Bitcoin by filing several ETFs that employ distinct strategies. On Tuesday, October 14, Ark Invest submitted applications for the Bitcoin Yield ETF and ARK DIET Bitcoin 1 and 2 ETFs to the U.S. Securities and Exchange Commission. These new ETFs will concentrate on yield generation and risk mitigation, providing institutions with enhanced flexibility for BTC exposure.
The approaches for Ark Invest’s new ETFs are straightforward. For instance, the ARK Bitcoin Yield ETF appeals to investors seeking cash flow from their BTC investments. The filings imply that these ETFs may leverage options-based strategies, such as writing covered calls, to generate yield while maintaining exposure to BTC.
Meanwhile, the ARK Defined Income Exposure & Target (DIET) Bitcoin ETFs cater to risk-averse investors wanting downside protection. Specifically, DIET 1 ETF offers 50% downside protection, with gain participation activated only once BTC appreciates by 5% over the quarter. Conversely, the DIET 2 ETF provides 10% loss protection and shares in gains when Bitcoin remains flat at 0% during the quarter.
Ark Invest’s Bitcoin ETFs anticipate institutional interest
The filings emerge as the SEC has expedited the process for crypto ETF approvals, cutting the approval timeframe to 75 days or fewer. Previously, SEC decisions could exceed 240 days, with frequent delays prolonging the waiting period further.
Additionally, this follows a significant crash in the crypto market that erased $1 trillion in market cap. As institutional investors grow increasingly concerned about potential volatility, the downside-protected ETFs from Ark Invest could play a key role in attracting more capital to Bitcoin.
