Ark Invest CEO Cathie Wood is attempting to create an asset that tracks the value of Bitcoin.
On, Monday, the investor — who is known for capturing value through innovative companies and sectors — filed with the Securities and Exchange Commission to create the “ARK 21Shares Bitcoin ETF.”
An exchange-traded fund (ETF) is a representative basket of shares that allows investors to hold multiple assets in an indexed form. For example, the SDPR S&P 500 ETF — which currently trades for roughly $430 — represents 500 of the largest companies on American stock exchanges.
According to the filing, Ark Invest’s ETF is composed of cryptocurrency startups such as Binance, Bitfinex, Bitflyer, Bittrex, Bitstamp, Coinbase Pro, Gemini, HitBTC, Huobi, Kraken, KuCoin, and Poloniex. However, as CNBC reports, Wood is attempting to purchase Bitcoin itself.
According to CNBC:
Wood has said she sees a future where bitcoin is part of a balanced investment portfolio. ARK Invest estimates if 1% of every company in the S&P 500′s corporate cash were converted into bitcoin, then the asset’s price would balloon by more than $40,000 from its current levels. If the cash level increased to 10% from each company in the broader stock index, bitcoin’s price would increase by more than $400,000, the firm said.
In November, Wood forecasted that Bitcoin could hit a price of $500,000. As Yahoo Finance explained:
Wood said the decision by the Fed to keep interest rates low, Bitcoin being a digital alternative to gold and an insurance policy against inflation as reasons why Bitcoin has increased in price. The increase in institutional investors getting involved in Bitcoin is where Wood sees the price increasing further.
Wood said it reminds her of the early days of institutions beginning to make small allocations to real estate and emerging markets. She said the allocations started at 0.5% and then rose to 5%.
If institutions allocated mid-single-digit amounts to Bitcoin, it would take the price to a range of $400,000 to $500,000.
Other leading investors are similarly bullish on Bitcoin — a cryptocurrency that exists virtually and is transmitted between users via blockchain technology. Mexican billionaire Ricardo Salinas Pliego expressed support for Bitcoin at the end of June, declaring that the digital asset is “a great way to diversify your investment portfolio.”