Empowered Funds Pursues SEC Approval for Bitcoin Futures ETFs in Collaboration with Ark Invest and 21Shares, Unveiling Innovative Strategies

Empowered Funds Pursues SEC Approval for Bitcoin Futures ETFs in Collaboration with Ark Invest and 21Shares, Unveiling Innovative Strategies

Empowered Funds, a subsidiary under the umbrella of Alpha Architect operating as EA Advisers, has taken proactive steps by filing applications to introduce a trilogy of groundbreaking Bitcoin futures exchange-traded funds (ETFs) in partnership with esteemed entities Ark Invest and 21Shares. As detailed by the Financial Times, these ETFs will bear the prominent labels of 21Shares and Ark Invest, yet the operational roles will be distinct: 21Shares assumes the role of subadviser, while Ark Invest takes on the role of sub-subadviser.

Empowered Funds’ Premier Bitcoin Futures ETF

Leading the trio is the flagship Ark 21Shares Active Bitcoin Futures ETF, meticulously designed to predominantly allocate its resources towards Bitcoin futures trading on the renowned Chicago Mercantile Exchange. Notably, this ETF assumes the pivotal role of serving as the foundational cornerstone for the other two interlinked Bitcoin-focused funds.

A Sophisticated Approach: The Ark 21Shares Active On-Chain Bitcoin Strategy ETF

The second installment, the Ark 21Shares Active On-Chain Bitcoin Strategy ETF, sets out with an innovative approach, reserving a minimum of 25% of its assets for allocation to the Digital Asset and Blockchain Strategy ETF. Distinctively, this fund employs an in-house proprietary trend indicator model, adeptly adjusting its asset allocation strategy in real-time response to the dynamic ebb and flow of bullish and bearish conditions within the Bitcoin market. During bullish cycles, this ETF possesses the flexibility to channel the entirety of its assets into the underlying ETF, thereby maximizing market exposure and potential gains.

Furthermore, in scenarios characterized by bearish market sentiment, the fund adeptly maneuvers by allocating up to 75% of its assets into secure avenues, namely US Treasury securities, money market instruments, and repurchase agreements. This tactical adaptation allows for prudent risk management during volatile periods. The ETF’s exposure to Bitcoin futures is meticulously recalibrated according to ongoing trend assessments, underscoring the fund’s commitment to maintaining strategic agility while the investment team retains overarching authority over allocation strategies.

Simultaneous Exploration: The Ark 21Shares Digital Asset and Blockchain Strategy ETF

The trilogy culminates with the Ark 21Shares Digital Asset and Blockchain Strategy ETF, which operates synergistically by investing in the foundational ETF. This ETF explores diverse investment opportunities that offer exposure to the realm of digital assets, alongside ventures engaged in blockchain technology, digital assets, the tech sector, and fintech enterprises. The fund has the prerogative to allocate up to 80% of its assets to the Bitcoin futures ETF or alternative assets, while reserving the remaining 20% for potential investment in liquid assets such as Treasuries and real estate investment trusts.

Elaborating on Financial Aspects and Leadership

While specific fee structures for these pioneering ETFs remain undisclosed, it is revealed within the filing that Ophelia Snyder, distinguished co-founder and president of 21Shares, assumes the role of portfolio manager for these innovative funds.

A Strategic Move to Diversify: Implications and Market Insights

Market observers and experts posit that the strategic collaboration between Ark Invest and 21Shares signifies a calculated endeavor to diversify their existing spectrum of Bitcoin ETFs. This endeavor, driven by the delay in the Securities and Exchange Commission’s approval of spot Bitcoin ETFs, underscores the intent of these entities to explore alternative avenues for the expansion of their cryptocurrency-oriented investment products.

In light of these regulatory challenges, Ark Invest’s proactive utilization of existing resources to enrich their array of cryptocurrency funds is evident. Notably, the parent entity of Empowered Funds, Alpha Architect, boasts an impressive roster of 15 ETFs, collectively holding assets valued at $1.9 billion as of July 31. Remarkably, the financial inflow from investors, amounting to a substantial $717 million throughout the preceding year leading to this date, underlines the resounding demand for investment products tied to the ever-evolving realm of cryptocurrencies.