Ark Invest files new Bitcoin ETFs with yield & risk mitigation

Cathie Wood’s Ark Invest filed for several new Bitcoin ETFs, including yield-generating and downside-buffered versions.

Summary

• Ark Invest filed several new Bitcoin ETF proposals with the U.S. SEC
• Finings include Bitcoin Yield ETF and ARK DIET Bitcoin 1 & 2 ETFs
• Investors are increasingly concerned about downside risks for BTC

Cathie Wood’s Ark Invest is doubling down on Bitcoin, filing several ETFs with specialized strategies. On Tuesday, October 14, Ark Invest filed for the Bitcoin Yield ETF and ARK DIET Bitcoin 1 and 2 ETFs with the U.S. Securities and Exchange Commission. The new ETFs will focus on yield and risk mitigation, giving institutions more flexibility when it comes to BTC exposure.

The strategies for Ark Invest’s new ETFs are simple. For one, the ARK Bitcoin Yield ETF targets investors who want cash flows from their BTC holdings. Filings suggest that these ETFs may use options-based strategies such as writing covered calls to generate yield, while maintaining BTC exposure.

At the same time, ARK Defined Income Exposure & Target (DIET) Bitcoin ETFs target risk-averse investors who want downside protection. Namely, DIET 1 ETF offers 50% downside protection, while gain participation is triggered only after BTC rises 5% over the quarter. On the other hand, DIET 2 ETF offers 10% loss protection and shares in gains when Bitcoin is up 0% in the quarter.

Ark Invest’s Bitcoin ETFs bet on institutional demand

Filings come after the SEC moved to streamline crypto ETF approvals, slashing approval time to 75 days or less. Before this move, the SEC’s decision could take more than 240 days, with delays frequently extending this timeline even further.

Moreover, this comes just after the crypto market crash, which wiped out $1 trillion in market value. With institutional investors increasingly worried about potential volatility, Ark Invest’s ETFs with downside protection could help attract more capital to Bitcoin.