Bitcoin ETFs

How to Invest in a Bitcoin ETF

How to invest in Bitcoin

While buying bitcoin has become as easy as the click of a button, some investors still prefer to stick to traditional investment vehicles to gain investment exposure to the digital currency. Currently, the only publicly traded ETFs (exchange-traded funds) that you can buy to invest in bitcoin are ARK Invest’s ARK Web x.0 ETF and the ARK Innovation ETF. In this guide, we’ll cover the basics of each.

ARK Web x.0 ETF

The ARK Web x.0 ETF (NYSEARCA: ARKW) was launched by ARK Investment Management LLC in 2015 as one of its actively managed Innovation ETFs. The ETF is listed on the New York Stock Exchange and was the first publicly traded ETF to invest in the digital currency bitcoin.

To gain exposure to bitcoin, ARK Invest purchased shares in Grayscale’s Bitcoin Investment Trust (OTCQX: GBTC), which is an over-the-counter traded fund that invests exclusively in bitcoin. (Read our guide to the Bitcoin Investment Trust here.)

Bitcoin is the largest holding in the ARK Web x.0 ETF and currently makes up eight percent of the fund. Aside from the digital currency, the ETF also provides investors with exposure to disruptive Internet-based businesses that are projected to experience significant growth in the future, such as cloud computing, machine learning, e-commerce, and others. Major holdings in the fund include Amazon, Tesla, Facebook, Alphabet, and Netflix.

Since its inception, the ARK Web x.0 ETF has generated 47.4 percent return. Year-to-date the net asset value (NAV) of the fund has increased by over 15 percent as the fund benefited from bitcoin’s steep rally since the beginning of the year.

The ETF has an expense ratio of 0.75 percent and is managed by Catherine D. Wood.

WEB X.0 ETF (ARKW) TOP 10 HOLDINGS

WeightCompanyTickerMarket Price Shares HeldMarket Value
6.83%AMAZON.COM INCAMZN$980.793,667$3,596,556.93
6.35%ATHENAHEALTH INCATHN$141.3523,681 $3,347,309.35
5.97%BITCOIN INVESTMENT TRUSTGBTC$398.257,900$3,146,175.00
4.65%TESLA INCTSLA$375.956,523$2,452,321.85
4.24%2U INCTWOU$43.3251,619$2,236,135.08
4.24%NVIDIA CORPNVDA$151.4014,767$2,235,723.80
3.65%ALPHABET INC-CLCGOOG U$953.402,017$1,923,007.80
3.59%HORTONWORKS INCHDP$13.38141,315$1,890,794.70
3.40%FACEBOOK INC-AFB$150.6811,901$1,793,242.68
3.32%SPLUNK INCSPLK$58.0930, 118$1,749,554.62

Source: ARK Invest. Data as of 6/14/17

ARK Innovation ETF

The ARK Innovation ETF (NYSEARCA: ARKK) combines the key holdings of ARK’s actively managed Innovation ETFs (Industrial Innovation, Web x.0, and Genomics Multi-Sector), which represent the investment manager’s cornerstone investment ideas. The largest holding in the ARK Innovation ETF is shares in Grayscale’s Bitcoin Investment Trust, which acts as a testament to the fund manager’s faith in the future of the digital currency’s price performance.

ARK INNOVATION ETF (ARKK) TOP 10 HOLDINGS

WeightCompanyTickerMarket Price Shares HeldMarket Value
6.83%BITCOIN INVESTMENT TRUSTGBTC$455.00 7,350 $3,344,250.00
6.81%TESLA INCTSLA$357.329,337 $3,336,296.84
6.13%ATHENAHEALTH INCATHN$138.8921,614$3,001,968.46
5.69%STRATASYS LTDSSYS$26.51105,036$2,784,504.36
4.49%AMAZON.COM INCAMZN$978.312,249$2,200,219.19
4.14%ILLUMINA INCILMN$174.0811,654$2,028,728.32
2.93%TWITTER INCTWTR$16.9085,028$1,436,973.20
2.81%NVIDIA CORPNVDA$149.609,206$1,377,217.60
2.69%BLUEBIRD BIO INCBLUE$111.90 11,768$1,316,839.20
2.31%JUNO THERAPEUTICS INCJUNO$21.6852,104$1,129,614.72

Source: ARK Invest. Data as of 6/12/17

The fund’s bitcoin exposure makes up 7.66 percent of the ETF’s holding. Other major holdings include shares in Tesla, athenahealth, Stratasys, Amazon, and Twitter.

Since the ETF’s inception in 2014, it has returned 22.1 percent. Year-to-date, the fund’s value has increased by 19.2 percent.

The ARK Innovation ETF also has an expense ratio of 0.75 percent and is managed by Catherine D. Wood.

How to Invest in ARK’s Bitcoin ETFs

Both the ARK Web x.0 ETF and the ARK Innovation ETF are traded on the New York Stock Exchange’s Arca exchange. NYSE Arca is an all-electronic exchange that lists over 8,000 exchange-traded funds as well as equities.

Securities listed on the exchange can be bought and sold by any institutional investor or private individual through their broker. Therefore, if you want to gain bitcoin exposure by investing in the ARK Web x.0 ETF or the ARK Innovation ETF, you can do so using brokerages that provide you with access to NYSE Arca listed ETFs. Those include Fidelity, E*Trade, OptionsHouse, Scottrade, and TradeStation.

If you found this guide helpful, please subscribe to Bitcoin Market Journal for more information on investing in bitcoin. 

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