Summary ARKB provides investors with full exposure to Bitcoin with the additional feature of Bitcoin cold storage. Bitcoin cold storage can provide an extra layer of security, keeping bitcoin holdings offline in a secured vault. Bitcoin may be supported by new legislation designed to support security and privacy for cryptocurrency. The ARK 21Shares Bitcoin ETF ( ARKB ) is a co-managed fund between Ark Investment Management and 21Shares, designed to provide investors with exposure to bitcoin. ARKB takes a differentiated approach to its investment strategy. Similar to the CoinShares Bitcoin ETF ( BRRR ), ARKB purchases and stores bitcoin in cold storage through a trusted custodian, potentially offering greater protection when compared to traditional brokerage accounts. Bitcoin cold storage is essentially the act of keeping the bitcoin in an offline environment, reducing the risk of being the victim of hacking and theft. Despite the assets being held in an offline environment, ARKB trades in tandem with bitcoin, offering investors indirect exposure to a more secured bitcoin investment strategy. TradingView As of July 21, 2025, ARKB held 50,251 bitcoins valued at $5.9b. Corporate Reports This compares to the fund's assets under management of $5.94b, suggesting that shares may be trading at a slight premium to assets. Seeking Alpha Compared to peer bitcoin ETFs, ARKB has a relatively low management fee of 21 bps, slightly below WisdomTree Bitcoin Fund ETF ( BTCW ), Invesco Galaxy Bitcoin ETF ( BTCO ), and iShares Bitcoin Trust ETF ( IBIT ), each charging 25bps. Compared to its closest peer, BRRR, ARKB provides substantially more liquidity with $5.94b in assets under management and an average of 2.5mm shares trading hands daily. IBIT exhibits the most volumes traded, with 47mm shares trading hands daily with $86b in assets under management. Despite the substantial trading depth, I do not believe these differences will impact overall liquidity or spreads. Given that the core differentiator between ARKB and peer bitcoin ETFs is that ARKB stores its bitcoin holdings offline, I believe this factor should be left to the investor in determining which bitcoin ETF suits them best. Performance across the bitcoin ETFs is relatively narrow, with a few basis point differences. Seeking Alpha Performance may remain strong for bitcoin given the strong capital inflows across bitcoin ETFs . According to Deutsche Bank, US-listed bitcoin ETFs have collectively gained $35b in inflows year-to-date. Despite the notion that bitcoin can offer investors an alternative investment strategy, bitcoin performance is relatively correlated to the broader market. I suspect that this phenomenon is the result of bitcoin ETFs being included in asset allocation in wealth management, making bitcoin a more commercially available asset that can be invested in, rebalanced, and sold for cash raises. Given these features, I do not believe bitcoin can provide investors with differentiated returns or act as a hedge against the US dollar or the broader market. TradingView On the regulatory front, the decentralized appeal of bitcoin may be shifting with the CLARITY Act , which will give the Commodity Futures Trading Commission [CFTC] a central role in regulating digital commodities and related intermediaries. The GENIUS Act , or Guiding and Establishing National Innovation for US Stablecoins Act, was passed and signed into law on July 18, 2025, establishing a framework to accelerate the development of stablecoins. This act could potentially support bitcoin through a less regulated market for stablecoins. Risks Related to ARKB Storing bitcoin in cold storage does come with certain risks. Because the assets are held offline, the assets will be held on a physical device such as a disconnected server or a number of other devices designed to store bitcoin. The bitcoin custodian for ARKB uses a multi-layer security protocol, meaning that the private keys, the cryptographic component that allows users to access bitcoin, are stored offline on hardware that has never been connected to the Internet in a cold storage vault. The only time the hardware will be taken out of the vault is to maintain the trading balance through Coinbase ( COIN ) or trading counterparty. Despite the secured protocol, there are a number of risks that may arise from maintaining a physical bitcoin wallet. Because these devices cannot be backed up, funds may not be recovered if the custodian were to lose access to the hardware wallet or if the wallet were to suffer physical damage or theft. This single point of failure can potentially increase the risk of holding bitcoin in cold storage, leading to a loss of assets in the event of theft or damage. Because hardware devices are disconnected from the Internet, regular updates to software may not be feasible, potentially adding certain risks to hardware failure or cybersecurity threats when connected to engage in transactions. Final Thoughts ARKB can provide investors with a differentiated approach to investing in bitcoin, with the cold storage component adding an extra layer of security or risk. Given that ARKB trades similarly to peer bitcoin ETFs, I do not believe ARKB will offer differentiated returns but rather an extra layer of security that may appeal to certain investors. Given the strong liquidity and general appeal for bitcoin, I am recommending ARKB with a BUY rating with a target allocation of 2-4%. If cold storage isn’t of interest, IBIT will make for an appealing alternative.
