Until U.S. regulators approve a dedicated bitcoin exchange traded product, some ETFs with backdoor exposure to the largest digital currency can serve as adequate ways in playing increased bitcoin adoption.
The ARK Fintech Innovation ETF (NYSEARCA: ARKF) is one of those ETFs, a status helped by the fund’s largest exposure to digital wallet companies, such as Square (NYSE: SQ) and PayPal (NASDAQ: PYPL). Following the lead of Square’s CashApp, it looks like PayPal with its Venmo digital wallet is looking to up its bitcoin standing.
“My understanding is that they are going to allow buys and sells of crypto directly from PayPal and Venmo,” a well-placed industry source told CoinDesk. “They are going to have some sort of a built-in wallet functionality so you can store it there.”
ARKF invests in equity securities of companies that ARK believes are shifting financial services and economic transactions to technology infrastructure platforms, ultimately revolutionizing financial services by creating simplicity and accessibility while driving down costs.
“ARK defines digital wallets as smartphone-enabled financial ecosystems that provide access to a variety of services including wealth management.
ARKF Angles on Bitcoin
Venmo and Cash App are the two largest digital wallets. ARKF allocates over 15% of its combined weight to Square and PayPal.
“Meanwhile, fintech apps that offer crypto are making money. Square, the payments unicorn launched by Twitter CEO Jack Dorsey, rolled out bitcoin purchases in its Cash App in mid-2018. Cash App reported $306 million in bitcoin revenue in its most recent earnings report,” according to CoinDesk.
In the past few years, a dozen regulated, insured custodians have emerged, along with a variety of trading venues with material liquidity. Investors may now find that futures and the ability to hedge are in place. Offerings are being made available from traditional financial institutions like Fidelity, Susquehanna, and CME, with more coming online.
“Crypto is increasingly seen as an obvious way to bolster user numbers on fintech apps and create new revenue streams. Indeed, PayPal CEO Dan Schulman has made it clear his plan this year is to aggressively monetize Venmo, which has over 52 million accounts,” reports CoinDesk.
ARKF is up 32.12% this year, making it one of the best-performing financial services ETFs of any stripe.
For more on disruptive technologies, visit our Disruptive Technology Channel.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.