Cathie Wood’s Ark Invest Completely Exits GBTC Ahead of Imminent Bitcoin ETF Approval

Ark Invest has completely exited its GBTC position as the fund manager aims to position itself ahead of a potential Bitcoin ETF approval.

Ark Invest is reportedly positioning itself for potential approval of a spot in the Bitcoin ETF by the United States Securities and Exchange Commission (SEC). Throughout the past month, Cathie Wood managed Ark Invest has divested its exposure to Grayscale Bitcoin Trust (GBTC), liquidating its shares within the period under consideration. 

On Wednesday, however, it appears that Ark Invest has now completed exiting GBTC. Bloomberg’s ETF analyst Eric Balchunas cited a holdings file received from Ark Invest as showing that the fund manager now has a 0% weight on GBTC.

good q. All I know is it is NOT in the holdings file they sent us, see below, 0% weight now. But it makes sense bc that's where the 5% for BITO came from I think pic.twitter.com/GKICR7N4GA

— Eric Balchunas (@EricBalchunas) December 28, 2023

On the same day, Ark Invest invested roughly $100 million in the ProShares Bitcoin Strategy ETF (BITO). The BITO ETF is a futures-based contract that offers exposure to the price of BTC, even though the fund does not hold the underlying asset.

Following the latest purchase, Ark Invest is now the second-largest BITO holder, trailing only Goldman Sachs. 

GBTC Sales and BITO Allocation Only “Temporary”

The allocation to BITO is assumed to be a temporary move, according to the experienced Bloomberg analyst. For one thing, it would facilitate a seamless transition if Ark Invest receives approval from the SEC to launch a spot Bitcoin ETF alongside competitors.

Following such an outcome, the fund would likely roll over the $100 million in BITO shares to the new spot Bitcoin ETF. Ark Invest may also convert its realized cash from GBTC sales to a newer product.

Meanwhile, Ark Invest also offloaded shares in other companies on Wednesday, notably including some crypto firms. The fund manager sold 148,885 Coinbase shares (valued at $27.5 million) and Block (valued at $18.4 million). However, the move appears to be more strategic than an effort to free up more funds for the spot ETF, even though the latter cannot be completely ruled out.

As previously reported by The Crypto Basic, talks between the SEC and fund managers seeking to launch a spot Bitcoin ETF have already advanced into their closing stages. A final amendment deadline has been set for December 29, with approval expected ahead of the 10th January 2024 decision date.