Cathie Wood’s ARK Boldly Shifts Millions into Its Bitcoin ETF

• ARK Investment Management sold its position in ProShares Bitcoin ETF to buy shares of its own ARK 21Shares Bitcoin ETF, aiming to quickly gain scale and assets under management in the crowded Bitcoin ETF marketplace.
• Last December, ARK exited its Grayscale Bitcoin Trust position and temporarily put the funds in ProShares Bitcoin ETF while awaiting SEC approval of spot Bitcoin ETFs.
• With the SEC approving 11 spot Bitcoin ETFs at once, first-mover advantage is eliminated, so asset scale and inclusion in model portfolios will likely determine winners.

Cathie Wood’s ARK Investment Management is aggressively acquiring shares of its newly launched Bitcoin ETF to gain a competitive edge.

Redirecting Funds to ARKB

ARK Investment Management’s ARK Next Generation Internet ETF (ARKW) sold off $16 million of its position in the ProShares Bitcoin ETF (BITO) on Tuesday. The funds were used to purchase 365,427 shares of ARK’s own 21 Shares Bitcoin ETF (ARKB), now making up 1% of ARKW’s total holdings.

Gaining Scale Crucial in Crowded Market

With the SEC approving 11 spot Bitcoin ETFs simultaneously last week, first-mover advantage is out the window. Gaining scale has become vital, as many financial advisors and platforms have minimum asset requirements for inclusion. Buying up shares of its own ETF allows ARK to quickly gain assets under management.

Exiting GBTC Position Previously

Last December, ARK Invest sold out of its position in the Grayscale Bitcoin Trust (GBTC) ahead of its conversion to a spot Bitcoin ETF. It put nearly $100 million of the proceeds into the ProShares Bitcoin ETF (BITO) while awaiting SEC approval of spot ETFs. This move was intended to be temporary, providing secure Bitcoin exposure while approvals were still pending.

Conclusion

Allocating funds from ARKW to rapidly scale up ARKB positions ARK Investment Management to compete in the crowded Bitcoin ETF marketplace. As the simultaneous approval of multiple funds negates any first-mover advantage, asset scale and inclusion in model portfolios will likely determine winners.