Regulators still have not approved a bitcoin exchange traded product in the U.S., but there are ways for investors to access the high-flying cryptocurrency via ETFs.
By way of a stake in the Grayscale’s Bitcoin Investment Trust (OTCQX: GBTC), the ARK Web x.0 ETF (NYSEArca: ARKW) offers investors bitcoin exposure.
The Bitcoin Investment Trust is currently ARKW’s second-largest holding at a weight of 5.4%. ARKW is an actively managed ETF that focuses on disruptive companies that help transform the market and was the first ETF to invest in bitcoins after the portfolio manager acquired publicly traded shares of GBTC. Amazon.com Inc. (NASDAQ: AMZN) is ARKW’s largest holding at just over 6%.
Bitcoin is a decentralized digital currency, or cryptocurrency, based on a peer-to-peer network and can be exchanged through computers internationally without a financial intermediary. The system was first introduced by an unidentified programmer or group under the name of Satoshi Nakamoto in 2009.
“Trading volume has absolutely exploded in ARKW this year, with monthly totals of fewer than 200,000 shares during the first quarter of 2017 giving way to totals in excess of 1 million during each of June, August, and September. And remarkably, per etf.com, the fund has not experienced a single day of outflows on its way to garnering net inflows of $65.14 million in 2017,” according to Schaeffer’s Investment Research.
Helped in part by its bitcoin exposure, ARKW is up 66% year-to-date, making it one of 2017’s best-performing non-leveraged ETFs.
Related: Bitcoin ETFs: One Step Forward, Two Steps Back
ARKW tracks a number of companies that benefit from increase use of shared technology, infrastructure and services in cloud computing, big data, social media, internet, devices and gateways, e-commerce, media ecosystems, health care, sharing economy, point of sale, telecom and cryptocurrencies
“The next couple of weeks should be interesting ones for ARKW. Along with GBTC, the fund has Amazon (AMZN) as its top holding — and the rumor mill suggests Amazon could announce a decision to accept direct bitcoin payments in its upcoming earnings report, which would give the cryptocurrency a massive boost in terms of PR (and, again, legitimacy),” notes Schaeffer’s. While this speculation is, as yet, completely unconfirmed, it would certainly fit with AMZN’s 2017 trend of nonstop industry disruption, and it’s hard to imagine this wouldn’t be welcomed with open arms by bitcoin bulls.
ARKW also allocates 4.3% of its weight to semiconductor maker Nvidia Corp. (NASDAQ: NVDA), which makes chips used in the mining of bitcoin.
For more information on the cryptocurrency, visit our Bitcoin category.