Ark Invest exits GBTC ahead of potential bitcoin ETF

Ark sold off over 2 million shares of the Grayscale Bitcoin Trust (GBTC) and put money to work in ProShares bitcoin strategy ETF

article-image

viewimage/Shutterstock modified by Blockworks

share

Cathie Wood’s Ark Invest is buying up shares of the ProShares bitcoin strategy ETF (BITO).

ARK’s Next Generation Internet ETF, which previously held a large amount of Grayscale bitcoin trust, also exited out of its position according to its holdings

Bloomberg Intelligence analyst Eric Balchunas said that the move is likely because it’s using the money from GBTC as a “[liquid] transition tool to keep beta to [bitcoin] while it legs into ARKW or ARKB.”

Loading Tweet..

Balchunas noted that this move wasn’t a surprise, and in his opinion was “smart.”

“Better to give your own ETF a nice [assets under management] boost,” he said.

The move was addressed by Cathie Wood, CEO of Ark Invest, in an interview with Bloomberg TV where she said that the move to exit GBTC and enter BITO was made “out of an abundance of caution.”

“BITO…is already approved, there’s no regulatory uncertainty having to do with it, so we chose to maintain our exposure through BITO for the time being,” Wood said

“There are some tax and regulatory uncertainties still, as part of this process…we don’t know exactly who’s going to be approved and whether they’ve met all of the criteria that the SEC has put before us. We know that we have, but we don’t know if others — including GBTC have. We just don’t know,” she continued.

As Balchunas said, and Blockworks previously reported, analysts believed that Ark would choose to sell its current GBTC position to move assets over to its bitcoin ETF. According to filings, the ETF — if it gets approved — would trade under the ticker ARKB as the Ark 21Shares Bitcoin ETF. 

Read more: As bitcoin ETF saga hits possible homestretch, here’s what to watch for

The SEC has a deadline of Jan. 10 to rule on the bitcoin ETF. Bloomberg’s James Seyffart believes that multiple decisions could be handed down — if the SEC is keen on giving the firms a green light — the week of Jan. 10.

As far as possible SEC approvals go, “we think the probabilities have gone up,” Wood said in the interview. 

“The SEC has been highly engaged,” she added.

However, it’s not a done deal yet. 

“This is the SEC and we never know what might happen along the way,” she continued.

Additionally, ARKW sold more Coinbase, continuing a selling spree that’s been happening for a number of weeks. So far this month, Ark sold nearly 3.7 million shares of both Coinbase and GBTC. Roughly 1.5 million of those shares are Coinbase, while the asset manager sold over 2 million of GBTC, which helped to fully exit its position.

Both Ark Invest and Grayscale are aiming to launch bitcoin ETFs, though both have different approaches. Grayscale is trying to convert GBTC to a bitcoin ETF. 

Earlier this year, a court sided with Grayscale, giving the firm a win over the Securities and Exchange Commission. The win meant that the SEC had to re-evaluate Grayscale’s proposed GBTC conversion into an ETF after the regulatory agency denied the initial application.


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research report - cover graphics (1).jpg

Research

In this report, we dive into crypto private market data to gather insights on where the future of the industry is headed. Despite a notable downturn in private raises, capital continues to infuse promising projects that aim to transform payments, banking, consumer experiences, community, and more, with 2023 being the fourth-largest year for crypto venture capital.

article-image

BUZZ holds shares of Coinbase, Robinhood and MicroStrategy

article-image

Opinion: Even though I didn’t pay for my “Diamond Hands” burger with BTC, don’t let that fool you into thinking that crypto’s development is futile

article-image

The results mark “a major positive inflection point,” one analyst says, as the exchange carries net income momentum into a crypto rally

article-image

While the slate of 10 US spot bitcoin funds have tallied $4.6 billion of net inflows thus far, half of the field is lagging the leaders

article-image

Trading volumes totalled $154 billion in Q4, including $125 billion in institutional volume

article-image

DeFi on Bitcoin is all the rage right now and Stacks is positioned to benefit