Cathie Wood Bets on Crypto Without Bitcoin in New ETF Filing

While Wall Street piles into bitcoin ETFs, Cathie Wood is placing a different bet. ARK Invest's latest SEC filing proposes something the crypto world hasn't seen yet: a diversified cryptocurrency fund that *deliberately excludes bitcoin*.

The Bitcoin-Free Crypto Play

ARK's dual ETF application centers on the CoinDesk 20 index, a benchmark tracking major digital assets including bitcoin, ether, solana, XRP, and cardano. The first proposed fund follows the index exactly as designed. But the second takes a contrarian approach—tracking the same basket while systematically removing bitcoin exposure through a combination of long index futures and short bitcoin futures.

This isn't just portfolio engineering; it's a philosophical statement. By stripping out bitcoin's 60%+ market dominance, the fund would amplify exposure to what many consider the "innovation layer" of crypto: smart contracts, decentralized finance, and next-generation blockchain infrastructure.

Both funds would trade on NYSE Arca and use cash-settled futures contracts rather than holding actual tokens, sidestepping custody complexities that have plagued direct crypto investing.

Why Exclude the King of Crypto?

The timing reveals ARK's strategic thinking. With bitcoin crossing $100,000 and gaining institutional acceptance as "digital gold," Wood appears to be positioning for the next phase of crypto evolution. Bitcoin has arguably won the "store of value" narrative, but the real innovation—and potentially outsized returns—may lie elsewhere.

Ethereum powers decentralized finance. Solana enables high-speed trading and gaming applications. XRP targets cross-border payments. Each represents a different thesis about blockchain's future utility, uncorrelated with bitcoin's macro-driven price movements.

The strategy echoes ARK's broader investment philosophy: identify transformative technologies before they reach mainstream adoption. If bitcoin is now the establishment, altcoins represent the disruption.

Market Gap or Market Risk?

ARK isn't alone in pursuing crypto diversification. WisdomTree and ProShares have filed similar index-based crypto ETFs, though none have received regulatory approval. The market clearly wants diversified crypto exposure beyond individual token investing, but regulators remain cautious about products that amplify already-volatile assets.

The "bitcoin-free" approach carries obvious risks. Altcoins typically exhibit higher volatility and deeper drawdowns during market stress. During 2022's crypto winter, many alternative tokens lost 80-90% of their value compared to bitcoin's 77% decline. Removing the sector's most stable asset could amplify both gains and losses.

Yet there's precedent for successful sector rotation. Technology investors who moved beyond Microsoft and Intel in the 1990s to embrace Google and Amazon reaped enormous rewards. The question is whether crypto's "next big thing" will emerge from the altcoin universe or remain concentrated in bitcoin's gravitational pull.

The Regulatory Wild Card

These filings arrive as crypto regulation enters a new phase under the Trump administration. While spot bitcoin ETFs gained approval relatively quickly, more complex products face higher scrutiny. Futures-based crypto funds must navigate commodity regulations, and products that exclude major assets like bitcoin may raise additional questions about market manipulation and investor protection.

The SEC hasn't yet received the formal 19b-4 filing from NYSE Arca, meaning the approval timeline remains uncertain. But ARK's track record with innovative ETFs—and the growing institutional appetite for crypto exposure—suggest these products have a fighting chance.