The founder of ARK Invest is unveiling that the investment firm did not buy the ProShares Bitcoin (BTC) exchange-traded fund (ETF) that was launched earlier this week.
In a Bloomberg interview, Cathie Wood says ARK Invest wants to understand the tax implications of the Bitcoin futures ETF first.
“No, we did not [buy the ProShares Bitcoin ETF]. And one of the reasons is we’re looking at this very carefully, the futures. There are some tax ramifications we’d like to understand more, having to do with contango. Contango versus normal backwardation. So, not yet.”
A market is in contango when the forward price of a futures contract is higher than the current or spot price. On the other hand, backwardation occurs when the spot value of an asset is higher than trading prices in the futures market.
Wood further says Bitcoin is the “new bank” as exemplified by El Salvador where millions are already using the cryptocurrency.
“I think the most fascinating thing that’s happening is in El Salvador. Have you heard? They deemed Bitcoin, the president who tweets every day, deemed Bitcoin legal tender… and sent a Chivo [Bitcoin] wallet to everyone in the population eligible. So four million.
Three million, it had $30 worth of Bitcoin in it, three million have downloaded it. Only 1.2 million in that country have a banking relationship. So this is the new bank, digital wallets. And it’s going to be true in this country, it’s going to be true around the world.”
Two of the three biggest holdings in ARK Invest’s ARKW ETF are crypto-related. ARKW holds Grayscale Bitcoin Trust (GBTC) shares worth nearly $390 million, about 7% of the fund, and Coinbase shares worth over $336 million, about 6% of the fund.
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