Empowered Funds Files For Bitcoin Futures ETFs

Empowered Funds, a subsidiary of Alpha Architect operating as EA Advisers, has submitted applications to introduce three new Bitcoin futures exchange-traded funds (ETFs) under the Ark Invest and 21Shares labels, the Financial Times reported. While these ETFs will carry the branding of 21Shares and Ark, the actual management roles will be designated differently: 21Shares will serve as the subadviser, and Ark will act as the sub-subadviser for these funds, the report stated.

Empowered Funds’ Bitcoin Futures ETF

The flagship of this trio, the Ark 21Shares Active Bitcoin Futures ETF, will predominantly allocate its resources to Bitcoin futures trading on the Chicago Mercantile Exchange. This ETF will also function as the foundational ETF for the other two Bitcoin-related funds.

The Ark 21Shares Active On-Chain Bitcoin Strategy ETF, a second in the series, is designed to allocate at least 25% of its assets to the Digital Asset and Blockchain Strategy ETF. This fund intends to utilize a proprietary trend indicator model to adjust its asset distribution strategy in response to the prevailing bullish or bearish conditions in the Bitcoin market. During bullish periods, the ETF has the flexibility to invest the entirety of its assets in the underlying ETF.

In the case of bearish market conditions, the fund will allocate up to 75% of its assets into US Treasury securities, money market instruments, and repurchase agreements. This ETF will adjust its exposure to Bitcoin futures according to its trend assessment, although its investment team will retain full authority over the allocation strategy.

Concurrently, the Ark 21Shares Digital Asset and Blockchain Strategy ETF, the third in the series, will invest in the foundational ETF and explore investments offering exposure to digital assets, as well as companies engaged in blockchain, digital asset, technology, and fintech sectors. This fund can allocate up to 80% of its assets to the Bitcoin futures ETF or alternative assets, with the remaining 20% potentially invested in cash equivalents like Treasuries and real estate investment trusts.

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Fees Of ETFs Undisclosed

Financial Times stated, while the exact fees for these ETFs remain undisclosed, the filing has revealed that Ophelia Snyder, the co-founder, and president of 21Shares, will take on the role of portfolio manager for these funds.

Experts speculate that Ark and 21Shares are aiming to diversify their lineup of Bitcoin ETFs with the possibility of launching their futures ETFs to enhance their broader ETF strategies. The recent delay by the Securities and Exchange Commission in approving spot Bitcoin ETFs has prompted these firms to seek alternative avenues to expand their crypto funds.

Despite the roadblocks in the spot Bitcoin ETF approvals, it’s evident that Ark is leveraging its existing resources to augment its array of crypto funds. The parent company of Empowered Funds, Alpha Architect, boasts an array of 15 ETFs with a combined asset value of $1.9 billion as of July 31. Throughout the year leading up to that date, investors have directed a substantial $717 million into these funds, underscoring the growing demand for crypto-related investment products.

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