Can I buy ARK 21Shares Bitcoin ETF shares?

Plans to take the ARK 21Shares Bitcoin ETF public have been cancelled. But you can invest in other crypto-related funds.

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The ARK 21Shares Bitcoin ETF has been rejected by the US Securities and Exchange Commission (SEC), so the fund is no longer going to be publicly offered. Here’s what we know about the ETF and how to invest in other cryptocurrency-related securities.

Note: All dollar amounts on this page are in US dollars unless otherwise stated.

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What we know about the ARK 21Shares Bitcoin ETF

On June 28, 2021, 21Shares US LLC submitted a registration filing with the US Securities and Exchange Commission (SEC) to create the ARK 21Shares Bitcoin ETF under the ticker symbol “ARKB.”

The ARK 21Shares Bitcoin ETF was unique, because it would actually hold Bitcoin as opposed to other cyrptocurrency-focused ETFs like the Valkyrie Bitcoin Strategy ETF that indirectly invest in Bitcoin via futures contracts.

Coinbase Custody Trust Company would hold the fund’s Bitcoin investments in trust, while ARK Investment Management LLC (headed up by Cathie Wood) would provide marketing assistance.

On March 31, 2022, the SEC released a rejection order, effectively preventing the ETF from being publicly traded on the basis that there were not sufficient measures in place to “prevent fraudulent and manipulative acts and
practices” and “to protect investors and the public interest.”

ARK similarly filed to create a Bitcoin futures ETF, but plans to take the fund public have been similarly squashed by the SEC’s decision.

For now, it seems, the SEC is not willing to open the door to allow crypto to be traded like regular stocks and ETFs.

Buy stocks in similar funds

Even though you won’t be able to buy into the ARK 21Shares Bitcoin ETF, you can still invest in other ETFs that track the value of crypto assets.

CompanyStock info
Purpose Bitcoin ETFTSX: BTCC
ProShares Bitcoin Strategy ETFNYSEArca: BITO
Grayscale Bitcoin Trust (BTC)OTC Markets: GBTC
Grayscale Ethereum Trust (ETH)OTC Markets: ETHE
Bitwise 10 Crypto Index FundOTC Markets: BITW
Global X Blockchain & Bitcoin Strategy ETFNasdaq Global Market: BITS

How to buy stocks in a company

You’ll need a brokerage account to buy and sell shares. Here’s how it works:

  1. Compare share trading platforms. If you’re a beginner, look for a platform with low commissions, expert ratings and investment tools to track your portfolio.
  2. Open and fund your brokerage account. Complete an application with your personal and financial details, like your ID and bank information. Fund your account with a bank transfer, credit card or debit card.
  3. Search for the company you want to invest in. Find the stock by name or ticker symbol (for example, BTCC). Research its history to confirm it’s a solid investment against your financial goals.
  4. Purchase now or later. Buy immediately with a market order or use a limit order to delay your purchase until the stock reaches your desired price. To spread out your purchase, look into dollar-cost averaging, which smooths out buying at consistent intervals and amounts.
  5. Decide on how many to buy. Weigh your budget against a diversified portfolio that can minimize risk through the market’s ups and downs. You may be able to buy fractional shares of companies, depending on your broker.
  6. Check in on your investment. Congratulations, you own part of a company! Optimize your portfolio by tracking how your stock — and even the business — performs with an eye on the long term. You may be eligible for dividends and shareholder voting rights on directors and management that can affect your stock.

Tax implications of buying US stocks in Canada

Agreements between Canada and the US require Canadians holding US stock investments to pay the US Internal Revenue Service (IRS) a 15% withholding tax on any dividends earned on their US stocks. Interest earned from bonds or other interest-yielding US investments are similarly taxed at a rate of 10%.

An exception is made for stock investments held in trust exclusively designed to provide retirement income. Such trusts include RRIFs, LIRAs, LIFs, LRIFs and Prescribed RRIFs. RRSPs are also exempt from US withholding tax if you own US investments in the form of US stocks, bonds or ETFs.

Investment accounts that do not qualify for this exemption include RESPs, TFSAs and RDSPs.

All income from investments, including foreign investments, must be declared as part of your income on your Canadian tax return. Unless your US earnings are exempt from withholding tax, this means you’ll be double taxed on those earnings — first by the IRS, then by the CRA. However, the CRA may allow you to claim foreign tax credits for any taxes you’ve already paid to the IRS.

Speak with a tax professional to find out what rules and exceptions apply to your circumstances.

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Note: The dollar amounts in this table are in Canadian dollars.

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Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading CFDs and forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades. Read the Product Disclosure Statement (PDS) and Target Market Determination (TMD) for the product on the provider's website.

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