ARK’s Bitcoin Fund: A Spot of Trouble?

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It has come to my attention – and, frankly, it’s a bit of a rummy business – that a good many chaps are now investing in these… well, let’s call them ‘digital whatsits’ – Bitcoins, to be precise. And, naturally, someone has had the bright idea of packaging them up into a fund. The ARK 21Shares Bitcoin ETF (ARKB +0.20%), you see, has rather taken the market by storm, accumulating a dashed impressive $3.3 billion in assets. Quite a sum, what? One of the larger funds of its kind, it seems. A bit like a particularly successful jumble sale, really.

Now, before one rushes headlong into this brave new world of finance, it’s as well to remember a thing or two. A spot of common sense, you might say. This fund, while appearing to offer a shortcut to the crypto craze, isn’t quite as straightforward as it looks. It’s a bit like ordering a ready-made suit – it may save you the bother, but it rarely fits quite as well as something tailored.

1. Shares, Not the Real McCoy

The first thing to grasp is this: when you purchase a share in the ARK Bitcoin ETF, you’re not actually acquiring a Bitcoin. Heavens, no! It’s more akin to owning a ticket to view a particularly shiny pebble. The fund itself holds the actual Bitcoins, while you, my dear fellow, possess merely a claim upon them. Rather like a landlord and a tenant, wouldn’t you agree? It’s comparable to funds like the SPDR Gold Shares, where you’re buying a share representing a claim on gold, not a pile of bullion for your mantelpiece. A perfectly sensible arrangement, of course, but one must be clear on the distinction.

Indeed, the ARK ETF is, at its core, an index fund, tracking the CME CF Bitcoin Reference Rate – New York Variant. A rather technical term, that, but the gist is that it’s designed to mimic the performance of Bitcoin, not to outperform it. A steady, reliable sort of fund, you might say, but lacking in a certain… panache.

2. Trading Hours, A Most Unwelcome Restriction

One of the great appeals of Bitcoin, for the more adventurous investor, is its 24/7 availability. Want to dabble at three in the morning? No problem at all! But the ARK fund, alas, operates on rather more conventional hours. It’s subject to the whims of the stock exchange, you see. A bit like a particularly stuffy club – open only during certain hours and requiring proper attire. You can’t simply buy or sell whenever the fancy takes you. A distinctly inconvenient arrangement, wouldn’t you say?

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And then there’s the small matter of the expense ratio. A trifling 0.21% annually, or $21 on a $10,000 investment. Not a king’s ransom, certainly, but enough to make a seasoned crypto enthusiast – one accustomed to the freedom of self-custody – raise a skeptical eyebrow. A bit like being charged for breathing the air in a particularly exclusive establishment.

3. Miss Wood’s Bullish Pronouncements

Now, it’s always a bit tricky to assess the motives of those in the financial world. But ARK’s co-founder and CEO, Miss Cathie Wood, is known to be something of a Bitcoin enthusiast. Whether this is genuine conviction or a clever bit of self-promotion is, of course, open to debate. A bit like trying to decipher the intentions of a particularly enigmatic aunt. But she forecasts a total cryptocurrency market capitalization of $28 trillion by 2030, with Bitcoin accounting for a hefty 70% of that figure. A rather optimistic prediction, wouldn’t you say? More than four times Nvidia‘s market cap, no less! A bold claim, and one that should be viewed with a healthy dose of skepticism, naturally. Still, a touch of optimism never hurt anyone.

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2026-01-28 20:53