The ARK 21Shares Bitcoin Exchange Traded Fund (ETF), also known as ARKB, has announced a 3-for-1 share split scheduled for June 16. The decision, according to fund issuer 21Shares, aims to increase the fund’s attractiveness to retail investors.
This move is expected to make the shares more affordable and enhance trading efficiency, as stated by 21Shares on June 2. The Bitcoin ETF’s investment strategy, aimed at tracking the Bitcoin price (BTCUSD), will remain constant. The fund’s Bitcoin holdings will stay the same, and it will continue its usual trading. Furthermore, the total net asset value of the fund will not be affected.
A stock split is a procedure where a company divides its current shares into multiple new ones. In a 3-for-1 split, every share transforms into three, while the total value stays intact. This strategy can be beneficial when investors feel intimidated by high asset or share prices, as reducing the price per share makes the stock more accessible to retail investors without altering the underlying value.
As of June 2, ARKB ended trading at $104.25 per share. If the stock split were to occur immediately, each share would be priced at approximately $35, a third of the current value.
Despite being a joint venture between 21Shares and investment manager ARK Invest, ARKB has recently been underperforming, experiencing outflows of $430 million over six consecutive trading days. Nevertheless, with total aggregate inflows of $2.37 billion, it is the third-largest fund trailing behind similar ETFs from BlackRock and Fidelity. As of now, ARKB manages $4.8 billion in assets and has a year-to-date return of 7.35%.
Spot Bitcoin ETFs in the US have seen a net outflow of $1.2 billion in the past three trading days. This trend coincides with a 4% drop in Bitcoin prices from over $108,000 to just under $104,000 on June 2. Despite this, consistent demand is evident from the seven consecutive weeks of net inflows reported by Glassnode.
