Cathie Wood, Ark Invest's founder and CEO. Ark Invest; Insider
Cathie Wood, Ark Invest, did not participate in the excitement surrounding the launch of the first bitcoin futures ETF. However, she is not ruling out the possibility.
Ark said Ark will not buy ProShares Bitcoin Strategy ETF due to tax implications.
"We are looking at this carefully... There are some tax implications we'd love to understand more."
Cathie Wood, Ark Invest's founder and CEO, was not able to join the Tuesday frenzy around the first bitcoin-futures exchange traded fund to be listed in America. However, she is not ruling out the possibility.
Ark, a star stock picker, revealed that he is avoiding ProShares Bitcoin Strategy ETFs (BITO) due to tax implications.
Wood replied, "No, we didn't," when she was asked if she had bought the fund at its debut. "We're very careful about this... there are tax ramifications that we'd love to understand more regarding contango versus normal backwardation.
Wood was referring specifically to the structure and function of the forward curve. Contango refers to a situation in which the futures price for a contract is higher than its spot price. The reverse is called backwardation, where the forward price for a futures contract is higher than the spot price.
Bitcoin's futures are often in contango, as is the case with other currencies. Jeffrey Halley, Oanda senior market analyst, stated that institutional investors such as Ark took a wait-and see stance.
Halley stated in a Wednesday note that contracts with longer terms are more costly than those with a shorter term. This means that you can lose money rolling expired contracts into the new month. They want an orderly roll with good two-way liquidity and a lower contango.
Oanda reported that Oanda had seen very little trading volume for BITO on Tuesday from institutional investors, but Vanda Research stated that they likely accounted the bulk of the overall volume, as retail investors sat out Oanda's debut.
The ProShares Bitcoin Strategy ETF launched second in terms of ETF launches, with over $1 billion worth shares trading on its first day.
Overall, Wood is still bullish about bitcoin. She also notes how Ark became involved in the digital asset in 2015. She invested in the digital asset back then believing that it would become as large as the US's monetary base, which was trillions of dollars. The market value of digital assets is currently $2.5 trillion. Bitcoin captures nearly half of that at $1 trillion.
"This is the new bank, digital wallet. It's going be true in this nation. She said it at the Milken conference.
What's the point? She was asked. She replied, "All in."