Ark Invest CEO Catherine Wood said the company is examining Bitcoin futures ETFs for tax implications.
Catherine Wood said that she did not invest in a tradable exchange-traded fund (ETF) for Bitcoin futures from ProShares on the day of its launch, but is considering such an investment in the future. At the Milken Institute conference, she argued that Ark Invest is considering Bitcoin futures ETFs in terms of tax implications associated with predicted market dynamics.
“No, we have not invested. There are some tax implications we would like to understand, more related to contango than normal backwardation, ”Wood said.
Jeffrey Halley, senior analyst at Oanda, believes that Catherine Wood was referring to the structure of the forward curve. Contango is a situation where the forward price of a futures contract is higher than the spot price. Backwardation is the reverse process where the forward price of a futures contract is lower than the spot price. Bitcoin futures are often in contango. This is probably why institutional investors like Ark Invest are taking a wait and see attitude.
“Long-term contracts are more expensive than in the first month. This means that you are losing money by transferring expiring contracts into a new starting month. Catherine Wood probably wants to see an orderly move with decent two-way liquidity and less contango, ”Halley added.
Recall that in June 2021, Ark Invest, together with 21 Shares, submitted an application for the launch of an ETF for Bitcoin to the US Securities and Exchange Commission (SEC). Ark Invest owns 8.3 million shares of the Grayscale Bitcoin Trust (GBTC), with BTC and ETH holding a significant position in the Ark Invest portfolio.
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