Examination of the 21Shares Bitcoin Exchange-Traded Fund (ETF) known as ARK
Introducing the ARK 21Shares Bitcoin ETF: A New Way for Traditional Investors to Enter the Cryptocurrency Market
The ARK 21Shares Bitcoin ETF (ARKB) is a groundbreaking financial instrument that offers investors an avenue to gain exposure to the cryptocurrency market through a traditional and regulated investment vehicle. Listed on the Cboe BZX Exchange, the ARKB ETF is designed to track the performance of Bitcoin by investing in cash-settled Bitcoin futures contracts.
The ETF's performance will reflect the volatility and trends inherent to Bitcoin, with historical data showing significant fluctuations similar to Bitcoin's price movements. This volatility, however, comes with potential gains, and investors must be prepared for price swings while maintaining a long-term perspective and staying informed about regulatory developments and market trends.
One of the key advantages of the ARKB ETF is its regulatory compliance. It operates under a framework approved by the U.S. Securities and Exchange Commission (SEC) that permits in-kind creations and redemptions, aligning it with evolving industry standards and improving tax efficiency. In July 2025, the SEC approved amendments allowing the ARKB ETF—as well as several other crypto ETFs—to shift from a cash-only creation/redemption model to an in-kind model using spot Bitcoin.
From a tax perspective, spot Bitcoin ETFs like ARK 21Shares offer advantages. For taxable accounts, standard capital gains taxes apply, but the in-kind model helps minimize taxable events and tax drag. For tax-advantaged accounts (e.g., Roth IRAs or Traditional IRAs), gains can be tax-free or tax-deferred, enhancing long-term growth potential.
The ARKB ETF's use of futures contracts may offer more stability compared to direct ownership. The ongoing development of blockchain technology and the potential for wider adoption of cryptocurrencies in various sectors could further boost Bitcoin's prospects.
The ETF's fee structure includes a Sponsor Fee of 0.21%, administrative fees, custody fees, distribution fees, and other expenses. The Sponsor Fee is waived for the first six months or the first $1 billion of Trust assets.
The primary roles of the ARKB ETF are managed by a Sponsor (21Shares US LLC), Trustee (Delaware Trust Company), Bitcoin Custodian (Coinbase Custody), and Sub-Adviser (ARK Investment Management LLC).
The ARKB ETF is best suited for investors with a moderate to high risk tolerance, a long-term investment horizon, and an understanding of cryptocurrency market dynamics. Its stock exchange listing provides familiarity and ease of access for traditional investors.
As institutional interest in Bitcoin continues to grow, with major companies and financial institutions expressing interest in the cryptocurrency, the ARKB ETF presents an attractive opportunity for investors looking to gain exposure to this burgeoning market while benefiting from the regulatory oversight and traditional investment structure of an ETF.
[1] Cboe BZX Exchange. (n.d.). ARK 21Shares Bitcoin ETF (ARKB). Retrieved from https://www.cboe.com/us/listings/arkb/
[2] SEC. (2021, July 6). SEC Approves Rule Change Allowing NYSE Arca, Inc. to List and Trade Shares of the ProShares Bitcoin Strategy ETF, the NYDIG Bitcoin ETF, and the Bitwise Bitcoin ETF. Retrieved from https://www.sec.gov/news/press-release/2021-134
[3] SEC. (2021, July 22). SEC Approves Rule Change Allowing NYSE Arca, Inc. to List and Trade the Grayscale Bitcoin Trust. Retrieved from https://www.sec.gov/news/press-release/2021-146
[4] IRS. (n.d.). Virtual currency. Retrieved from https://www.irs.gov/businesses/virtual-currency-guidance
[5] Michigan State Employees’ Retirement System. (2021, August 18). Michigan State Employees’ Retirement System Announces New Investments in Cryptocurrency. Retrieved from https://www.michigan.gov/mserc/0,9603,7-387-90441_91063_91177-293496--,00.html
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