Mentioned in Video:
- Bitcoin to $500K or ZERO? | Is BTC Safe Enough for Tesla & Big Banks? (ARK Invest Big Ideas 2021): https://www.youtube.com/watch?v=B5R2-o-tJI8
- Could Tesla Clean Up Bitcoin? | HUGE Opportunity for Elon's Bitcoin Energy Concerns: https://www.youtube.com/watch?v=h9Rwqi5jQdI
- Cathie Wood’s Ark Invest to create a bitcoin ETF under the symbol ‘ARKB’ (CNBC): https://www.cnbc.com/2021/06/28/cathie-woods-ark-invest-files-to-create-a-bitcoin-etf.html
- Cathie Wood's SEC Filing for $ARKB: https://www.sec.gov/Archives/edgar/data/0001869699/000119312521201955/d165184ds1.htm
- Blockchain and Money (Prof. Gary Gensler, MIT and Chairman of the SEC): https://ocw.mit.edu/courses/sloan-school-of-management/15-s12-blockchain-and-money-fall-2018/
- Support the channel and get extra member-only benefits by joining us on Patreon: https://www.patreon.com/tickersymbolyou
🤩 #CathieWood just filed for #ARKB, the newest #ARKInvest fund focused on tracking the price of #Bitcoin. This is huge Bitcoin news today and could affect bitcoin price predictions in the near future. This is also huge news for #ARKW and #ARKF, which could see $ARKB as one of their holdings. Here is a quick video with everything you need to know about @ARK Invest‘s newest fund!
Hey there, Sarah. Cathie Wood's ARK Invest filing for a Bitcoin ETF with the SEC, this will be called ARK21 shares. Bitcoin ETF. If approved, a number of companies have filed and are waiting for SEC approval…
Oh, my God. Okay, it's happening, everybody stay calm. What's the procedure? To stay f*****calm!
That's me. Every time Arc Invest files for new ETF. So in this episode, I'm going to stay calm, keep things short and sweet, and tell you five quick things you need to know about ARKB, ARK Invest's potential upcoming Bitcoin ETF. Let's get right into it. First, ARKB, even though it will have the signature ARK and the ticker won't be a basket of stocks. If you read the SEC filing, which I've linked in the description below, you'll see that this fund is concentrated in a single asset: Bitcoin. By concentrating its investment strategy solely in Bitcoin,
any losses suffered as a result of a decrease in the value of Bitcoin can be expected to reduce the value of an interest in the trust and will not be offset by other gains if the trust were to invest in underlying assets that were diversified. The trust provides direct exposure to Bitcoin and provides investors with the opportunity to access the market for Bitcoin through a traditional brokerage account, without the potential barriers to entry or risks involved withholding or transferring Bitcoin directly or acquiring it from a Bitcoin spot market.
The trust will also custody its Bitcoin with Coinbase, another big holding for ARK Invest. So ARKB is a tool to grant stock portfolios direct exposure to the price of Bitcoin without having to do all the things involved in buying the cryptocurrency itself. And that leads us right into point number two, which is that approval for ARKB is not guaranteed. In fact, there are over ten other SEC applications for Bitcoin ETFs awaiting approval. In the past, the SEC has raised concerns about Bitcoin's volatility and sensitivity to market manipulation.
While Bitcoin and the crypto market are both much more mature than they were a few years ago, you don't need to look much further than the effects of Elon Musk's tweets to see that they're still incredibly sensitive to the news. In my opinion, this may actually never change for Bitcoin, since the primary mover of its price is demand and changes in sentiment around it reflect changes in demand. Gary Gensler, the new chairman of the SEC, used to teach a course at MIT called Blockchain and Money, so he's probably the right guy to finally approve these Bitcoin ETFs, if they should be approved.
I'm excited to see what happens. And, point number three. Assuming ARKB does get approved, we could see it get placed in other ARK funds. There's actually already precedent for this. ARK Invest's 3D printing ETF, ticker symbol PRNT, can currently be found in ARKX, ARK Invest's fund themed around space exploration. Given that, I wouldn't be surprised to see ARKB make its way into ARKW, ARK Invest's fund themed around the next generation of Internet applications and ARKF, their fintech Innovation fund, both of which seek to grant portfolios' exposure to blockchain technology.
If that raises your eyebrows like it does mine, you should know that when ARK Invest embeds one of their ETFs in another, you're not getting double charged on these management fees. They do it because they genuinely feel that their ETFs are the best way to grant the right exposure to certain innovation platforms or technologies. So why does Cathie Wood think you need exposure to Bitcoin? Because she has a roughly $500,000 price target for it. That's point number four and no, I'm not kidding. According to ARK Invest's 2021 Big Ideas Report, which I've linked in the description below as well,
if all the companies in just the S&P 500, not the world, allocated 1% of their corporate cash to Bitcoin, its price would increase by approximately $40,000. If they allocated 10%, it would go up by a whopping $400,000 instead. Likewise, if big financial institutions, think big banks, pension funds, insurance companies, and so on got into Bitcoin, they could drive the price up dramatically as well. A 1% allocation from them would move the price by around $80,000. These numbers aren't just daydreams. There are good reasons for corporations and financial institutions to do this.
Bitcoin has a very low correlation to other asset classes, meaning it doesn't really move the same way as they do. Corporations and institutional investors can use Bitcoin to diversify their assets and increase their returns over time. That's solid money management. If you're interested in learning more about Cathie Wood's $500,000 Bitcoin price target or Tesla's investment in it, check out my episode on that. I'll link it in the top right hand corner of your screen right now, and in the description below as well. Speaking of Tesla and Bitcoin, number five is ARK's other funds already have some exposure to Bitcoin specifically and cryptocurrency in general.
Something like 8% of Tesla's cash is currently in Bitcoin. 1% of all Squares assets is currently in Bitcoin. Coinbase is one of the biggest cryptocurrency exchanges and the first one to be publicly traded after its IPO on April 14th. Coinbase's ticker symbol is COIN, and its stock price is obviously very sensitive to Bitcoin. So even if you're not interested in crypto, you should be aware that three of ARK Invest's top ten positions are affected by Bitcoin, and it's an increasingly important part of their funds performance.
Here's a bonus tip. Elon Musk and Jack Dorsey, Square's CEO, have agreed to chat in late July at a Bitcoin event called the B Word, which is a Bitcoin focused initiative that aims to demystify and destigmatize mainstream narratives about Bitcoin. It aims to explain how institutions can and should embrace it and raise awareness around areas of the network that need support. Cathie Wood will also be a featured speaker at that event. This is significant because Elon Musk has raised concerns over Bitcoin's environmental impact in the past.
While Square and ARK Invest have jointly published a paper arguing that clean energy initiatives around Bitcoin mining are a net positive for the environment. If you're interested in the details on that and my moonshot of how Tesla could come out with an integrated clean energy solution for crypto mining, check out that episode. I'll leave a link to that one in the top right hand corner of your screen right now and in the description below as well. So if you're as crypto curious as Elon Musk is, stay tuned for that event.
If Jack Dorsey and Cathie Wood can change Elon's mind on the environmental impacts, it could provide some serious near-term catalysts for Bitcoin's adoption. I'm a big believer that better information today means better investments tomorrow. So hopefully this video helped you understand what ARKB might look like, how it could fit into ARK Invest's ecosystem of funds. And Cathie Wood's overall vision of Bitcoin's future. If it did, or you just really like memes from The Office –
What's the procedure? Stay f****** calm!
– consider liking this video and subscribing to the channel with all notifications turned on. That way, you'll be the first to know when I come out with new information like this, regardless of how YouTube tunes its algorithm. Thanks for watching. And until next time. This is Ticker Symbol: You. My name is Alex, reminding you that the best investment you can make is in you.
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