ARKB: Bitcoin's Rise as a Risk Asset
The ARK 21Shares Bitcoin ETF (ARKB) is designed to track the price performance of bitcoin, making it accessible to everyday investors. Launched in January 2024 by ARK Invest with 21Shares US LLC as its sponsor, the ETF uses Coinbase Custody Trust Company as its custodian for bitcoin holdings.
As a passively managed exchange-traded fund, ARKB provides investors with direct price exposure to bitcoin, which has historically been known for its volatility. However, in recent years, bitcoin's correlation to equity markets has increased, making it more akin to a risk asset rather than a hedge against the market.
ARKB currently holds approximately $2.52 billion in net assets, with an average daily trading volume of $38.45 million and a bid/ask spread of 0.04%. The ETF's expense ratio stands at 21bps, which is relatively low compared to its peers. For those seeking high liquidity, the iShares Bitcoin Trust ETF (IBIT) may be preferred, but for buy-and-hold strategies, the Grayscale Bitcoin Mini Trust ETF (BTC) with a fee of 15bps could be more suitable.
The price performance of ARKB is tied to the CME CF Bitcoin Reference Rate, New York Variant, and investors should consider it as a speculative position due to bitcoin's lack of fundamental value. Elliott Wave Theory may provide some predictability in market trends, but its use should be part of a broader trading strategy.