ARK Invest To Offer Crypto Separately Managed Accounts (SMAs) to Financial Advisors

On October 3, Cathie Wood’s ARK Invest announced a partnership with Eaglebrook Advisors to offer its first separately managed crypto accounts (SMAs) to financial advisors and wealth managers.

Through this joint venture, registered clients of the investment advisors will be able to use two different ARK-managed investment strategies: one focused on “Cryptoassets” and one for “Cryptocurrency” investments.

A new product for crypto enthusiasts

Cathie Wood, the founder, CEO and CIO of ARK said that they have been actively working in the crypto space since their founding in 2014 to provide their clients with investment services in securities and securities related to cryptocurrency.

Therefore, this alliance between Ark and Eaglebrook will expand its reach into the crypto ecosystem, offering new “actively managed crypto strategies to the wealth management industry.”

Wood further highlighted that strategies will be managed independently through separate accounts to meet the needs of all parties involved, allowing them to diversify their portfolios and gain exposure to digital assets.

“The strategies will be separately managed accounts (SMAs) designed to meet the needs of financial advisors, wealth managers and their clients by offering direct ownership, low minimums and portfolio reporting integration, among other benefits.”

Christopher King, founder and CEO of Eaglebrook Advisors, explained that ARK will help Eaglebrook drive the growth of the crypto industry by providing easy access to institutional and trusted cryptocurrency strategies for digital assets.

“Our partnership with ARK will advance this industry and provide institutional access to actively managed crypto strategies in the wealth management market.”

How will ARK investment strategies work?

According to the statement, both strategies (the ARK Cryptocurrency Strategy and the ARK Cryptoasset Strategy) will operate independently of each other, focusing on different investments. This means that each SMA’s risk exposure (and of course the opportunity for profit) could change depending on the circumstances.

The ARK cryptocurrency strategy will cater to investors looking for a “high conviction portfolio”, with investments primarily in major cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH).

On the other hand, the ARK Cryptoasset strategy will be slightly riskier as it will include 10-20 altcoins focused on smart contract networks, decentralized finance (DeFis), Web3, and infrastructure and scale.

Yassine Elmandjra, ARK’s crypto asset analyst, noted that ARK is pleased to offer investors these strategies at a time when “speculative behavior [in the crypto market] has calmed down.”

Ark Invest’s Previous Moves in the Crypto-Verse

Ark Invest currently manages eight ETFs in the United States. However, his dream Bitcoin ETF has been rejected by the SEC over concerns that it will not be able to protect investors from market speculation. To date, the United States has not approved a crypto ETF focused on the spot market.

The ARK Innovation ETF (ARKK) is quite popular among crypto enthusiasts for its large exposure to crypto. Cathie Wood’s company has invested in some crypto stocks like Twitter, Coinbase and Tesla along with more than 8 million shares in Grayscale Bitcoin Trust (GBTC).

The company is long bullish on crypto, perhaps too long. In April 2022, Cathie Wood said that Bitcoin could reach $1 million per coin by 2030. To achieve such a high price, investors need to really see the value of Bitcoin and reallocate a significant part of their assets:

“We don’t need much. All we need is for 2.5% of all assets to be allocated to Bitcoin.”

It looks like Wood is doing his part to make that dream a reality.


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