Cathie Wood’s ARK exits Grayscale GBTC entirely as spot ETF anticipation rises News ▸ US ▸ Coinbase ▸ Bitcoin ▸ Investments
Cathie Wood’s ARK exits Grayscale GBTC entirely as spot ETF anticipation rises
Ark Invest has been actively involved in trading activities that has impacted its Bitcoin-related holdings.
2 min read
Updated: Dec. 28, 2023 at 10:17 am UTC
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Cathie Wood’s asset management firm ARK Invest’s Next Generation Internet ETF (ARKW) sold all its positions in Grayscale’s Bitcoin Trust (GBTC) on Dec. 27 and purchased $92 million worth of ProShares Bitcoin Strategy ETF (BITO), according to the company’s latest trade filing.
ARK divesting positions in COIN and GBTC
The trading activity continues a recent selling spree that has impacted several Bitcoin-related holdings, including Coinbase’s COIN stock, as ARK tries to rebalance its fund weightings.
In November, the fund divested more than 700,000 units of GBTC holding despite the rising value of the shares due to the market optimism surrounding the possible approval of a spot Bitcoin (BTC) exchange-traded fund (ETF) in the U.S. At the time, GBTC represented more than 9% of ARKW’s portfolio.
Additionally, the firm has sold over $200 million worth of Coinbase stock this month, dumping around 500,000 units of COIN stocks during the past week alone.
COIN is one of the best-performing stocks of the past year, up more than 400% on the year-to-date metric, according to Tradingview data.
‘Temporary’ BITO purchase
Meanwhile, the firm’s purchase of BITO shares makes it the second-largest holder of the fund. However, this purchase is surprising, considering its BTC spot ETF application is currently under review.
Eric Balchunas, a senior ETF analyst for Bloomberg, explained that ARK’s purchase of BITO shares was likely a “liquidity transition tool” to retain “high beta” with Bitcoin. He said:
“ARK is now the second biggest holder of BITO, although again this is a temporary parking spot. They (and institutions generally) use highly liquid ETFs for transitions like this.”
Additionally, Balchunas pointed out that the move would help to enhance the ETFs’ assets under management (AUM) and potentially offer advantages to their investors by improving expense ratios.
BITO is ARKW’s sixth-largest holding, ahead of electric car giant Tesla and crypto investment platform Robinhood.
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Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Grayscale Investments
Established in 2013 by Digital Currency Group, Grayscale Investments is a trusted authority on digital currency investing and cryptocurrency asset management.
Coinbase
Coinbase is a digital currency exchange and wallet service that allows individuals to buy, sell, and store digital currencies, such as Bitcoin, Ethereum, and Litecoin.
Cathie registered ARK Investment Management LLC (“ARK”) as an investment adviser with the U.S.
