- ARK Invest, under Cathie Wood’s leadership, sold all its Grayscale Bitcoin Trust holdings, valued at $200 million, on December 28.
- The firm reinvested half of the proceeds, around $100 million, into the Bitcoin Futures ETF Bito, becoming its second-largest holder.
- The move coincides with market speculation about the approval of a spot Bitcoin ETF, which ARK’s CEO Cathie Wood views positively.
In a significant shift in investment strategy, ARK Invest, an asset management firm led by Cathie Wood, recently liquidated its entire holdings in the Grayscale Bitcoin Trust (GBTC). This decision, revealed by Bloomberg ETF analyst Eric Balchunas, marks a notable change in the firm’s approach to cryptocurrency investments.
From GBTC to Bitcoin Futures
The sale of the GBTC holdings, which amounted to a substantial $200 million, took place on December 28. Following this, ARK Invest channelled approximately $100 million of the proceeds into the Bitcoin Futures ETF Bito. This strategic move has positioned ARK Invest as the second-largest holder of Bito, indicating a new direction for the firm’s crypto investments.
A Strategic Shift Amid Market Speculation
This isn’t the first time ARK Invest has adjusted its crypto holdings. The firm began reducing its GBTC shares back in October when Bitcoin’s price first reached $34,000. During that period, it sold 100,739 GBTC shares worth $2.5 million from its ARK Next Generation Internet ETF (ARKW). In December, ARK Invest sold an additional 809,441 GBTC shares for $27.9 million. Alongside GBTC, the firm also sold 148,885 shares of Coinbase, totalling $27.5 million, from the same ETF.
Anticipating a Spot Bitcoin ETF
The timing of these investment moves is crucial, aligning with heightened speculation regarding the approval of a spot Bitcoin ETF. Analysts like Balchunas have expressed a high probability of such an ETF being approved, with a 99% chance before the deadline of January 10, 2024. Cathie Wood, a well-known supporter of Bitcoin, has echoed these sentiments, suggesting that while the short-term impact on Bitcoin’s price could be negative, the long-term outlook remains promising.
During a recent interview, Wood elaborated on her views, stating that the growing anticipation for the approval of spot Bitcoin ETFs might lead to a temporary dip in Bitcoin’s price. However, she remains optimistic about the future, believing that such approval could pave the way for more institutional adoption and a positive long-term trajectory for Bitcoin. This strategic pivot by ARK Invest, from GBTC to Bitcoin Futures ETF, reflects a nuanced approach to navigating the evolving landscape of cryptocurrency investments.