Ark anticipates win in US crypto ETF battle with ‘deepest’ suite, COO says
The firm has proposed seven crypto ETFs in the US with partner 21Shares, but “we don’t think that’s where this will end,” according to the Ark Invest exec
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As a range of firms chase a spot bitcoin ETF, Ark Invest expects to differentiate by ultimately bringing more exposures than rivals to market, the company’s chief operating officer said.
The Securities and Exchange Commission approving a spot bitcoin ETF would be “just the beginning” for the US crypto ETF space — spurring a “metamorphosis” for digital asset access for TradFi users, Ark Invest Chief Operating Officer Tom Staudt told Blockworks in an interview.
“We believe firmly that we will have the most encompassing, most complete, most diverse and deepest crypto suite of products in the ETF wrapper in the United States,” he added. “We want to be the crypto solution for the ETF market.”
Like a handful of other fund groups, Ark Invest — in tandem with Europe-based crypto ETP issuer 21Shares — has a proposed spot bitcoin ETF in front of the SEC. The Cathie Wood-led firm is set to receive a ruling on that product from the securities regulator by Jan. 10.
The firms have also, similarly to competitors, filed for an ETF that would invest in ether futures contracts — a type of fund expected to launch next month.
But Ark Invest and 21Shares have planned other crypto offerings, such as a fund that would invest in both bitcoin futures and ether futures contracts. Another would blend bitcoin futures exposure with crypto- and blockchain-related equities.
The two companies then made headlines earlier this month by filing for a spot ether ETF.
“Right now we have seven filings; we don’t think that’s where this will end,” Staudt said. “We think that the regulators and the market are both going to approve and demand more solutions for deeper exposures and more specific exposures.
“Obviously the obstacles and the big opportunities are still ahead of us,” he added.
Though Ark intends to ultimately have the most comprehensive crypto suite, it is not the only one chasing multiple crypto products.
ProShares was the first to launch a bitcoin futures ETF in October 2021 and also filed for various ether futures-related strategies last month. VanEck, Valkyrie and Bitwise also have live bitcoin futures offerings and intend to broaden their ETF lineups with exposure to ether futures, spot bitcoin and, in VanEck’s case, a spot ether product.
It’s not a stretch for Ark Invest to believe they can become a US leader in the segment given 21Shares is the world’s largest provider of ETPs, according to Nate Geraci, president of The ETF Store. The challenge, he added, will be navigating the “absolutely brutal competitive environment,” particularly when it comes to fees.
“Ark isn’t exactly known as a low-cost leader with their existing product lineup, so the question is how committed will they be to fighting for crypto ETF assets based on fees?” Geraci told Blockworks.
The company has a competitive advantage when it comes to marketing, however, he argued — an asset industry watchers have said will be crucial given the crowd of fund issuers seeking to launch similar funds.
“Nobody in asset management markets their firm and products the way Cathie Wood does,” Geraci said. “That could be a game changer if their crypto ETFs are competitively priced.”
Ark’s focus on the pending US crypto ETFs comes as the firm’s other main priority is bringing its existing, non-crypto innovation strategies to Europe. Last week, the company acquired thematic fund specialist Rize ETF Limited, giving the firm an entry point into that market.
Though Europe already has its share of crypto ETPs trading, Ark could seek to bring some differentiated crypto-related offerings to Europe — and other global markets — down the line, Staudt said.
But the executive noted that right now, getting its crypto ETFs approved in the US is more pressing.
“We’re really intending to not take our eye off the ball at what we think is a critical juncture,” Staudt added. “It’s pretty fair to say the US crypto ETF market is on the precipice of the inflection point.”
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