Aaryamann Shrivastava
FXStreet
- Cathie Wood's ARK Invest sold its ProShares Bitcoin ETF (BITO) holdings to buy its own spot BTC ETF (ARKB).
- ProShares, on the other hand, has filed for multiple leveraged and inverse ETFs against spot Bitcoin ETFs.
- ProShares is trading the risk on both ends of the spectrum in order to attain maximum profits.
Spot Bitcoin ETF approvals that came in the past week have grabbed the attention of investors - retail and institutional. With over $9.6 billion worth of volume traded in the first three days, the opportunity to jump onto the hype and book profits is driving even asset managers to make some changes in their portfolios.
ARK sells ProShares
ARK Invest, headed by Cathie Wood, sold the ProShares Bitcoin Strat ETF (BITO) holding from its portfolio to make room for its own spot Bitcoin ETF - ARK 21Shares Bitcoin ETF (ARKB). ARK sold off about 757,664 shares of BITO worth nearly $16 million, buying back an equal value of ARKB.
ARKW fund distribution
The reason behind the decision is unknown at the moment; however, according to investor Jay Dilks, this is ARK's attempt at gaining permission to invest up to 25% of its assets in the ARKB ETF. He stated,
"This will likely lead to $ARKB being permitted to run to 25% weight someday in the Fund. Everyone always talks about the perceived 10% Glass Ceiling for any holding but ARKW just filed to change their rules for 25% concentration on the high side. My prediction is ARKW becomes the Honeypot to finally let the winners RUN.
This news came to light a few hours after ProShares filed for five new ETFs against the spot Bitcoin ETFs. These five filings included two leveraged ETFs (+1.5x & +2x) and three inverse ETFs (-2x, -1.5x & -1x).
Leveraged ETFs aim to magnify investment returns, often doubling or tripling the market's daily performance. Inverse ETFs move in the opposite direction of their underlying index, providing a way to profit from market declines. Both involve heightened risk and are typically suitable for short-term strategies due to the compounding effects on daily returns.
Interestingly, the effective date for the filing is set on April 1, while the fee structure and tickers are yet to be announced.
5 New #Bitcoin ETF based ETFs filed - leveraged and inverse - based on the daily performance of the Bloomberg Galaxy Bitcoin Index
— ETF Hearsay by Henry Jim (@ETFhearsay) January 16, 2024
ProShares UltraShort Bitcoin ETF (-2x)
ProShares ShortPlus Bitcoin ETF( -1.5x)
ProShares Short Bitcoin ETF (-1x)
ProShares Plus Bitcoin ETF (+1.5x)… pic.twitter.com/kGvmFERCQK
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