Investment firm ARK has made a key financial move in the crypto market by selling a part of its Grayscale Bitcoin Trust (GBTC) shares. This happened as Bitcoin ($BTC) rose in bullish pressure, touching $35,000 before settling at around $34,000 at press time.
As per reports, the firm led by Cathie Wood has sold 100,739 GBTC shares, valued at approximately $2.5million, from its ARK Next Generation Internet ETF (ARKW). GBTC is the largest asset held in the ETF, accounting for more than 10% of its portfolio.
The sale occurred as GBTC reached its highest value in several months, hitting $24.7 for the first time since May 2022. As per TradingView, the asset has surged more than 200% year-to-date and is up by over 40% in the last one month.
The recent move represented ARK’s first reported GBTC transaction since November 2022. This was when it had added GBTC shares worth $4.5m to ARKW. The sale accounted for about 2% of the total GBTC value in ARKW’s portfolio, which stands at around $122m as of press time.
While GBTC is a significant component of ARKW fund’s total exposure, other notable investments include shares in Coinbase and Roku, with 9% and 7.4%, respectively.
Industry experts, like Bitcoin advocate Samson Mow, suggested that this sale could be strategic, anticipating ARK’s potential transition to its own Bitcoin-based exchange-traded fund (ETF), pending SEC approval. A potential green light from the United States Securities and Exchange Commission (SEC) regarding spot Bitcoin ETFs is being speculated which has pumped the cryptocurrency market off-late.
Recently, Grayscale filed a new BTC ETF registration statement with the SEC on 19 October, just a few days after ARK amended its spot Bitcoin ETF filing. The amendment added additional information about the proposed spot Bitcoin ETF, including practices for how the fund will custody assets and determine asset values
The news came weeks after Grayscale got an edge on an SEC lawsuit for its spot Bitcoin ETF review. Here, the U.S. Court of Appeals for the District of Columbia Circuit ordered the SEC to explain why it rejected Grayscale’s application in June 2023.
While there have been talks about ARK replacing GBTC with its own ETF in ARKW, should they receive SEC approval for the Bitcoin ETF, Grayscale also awaits approval from the SEC to convert its GBTC to an ETF.
GBTC is the world’s largest Bitcoin fund and offers institutional investors to gain exposure to Bitcoin without holding the asset directly. Besides ARK Invest and Grayscale, some of the other companies seeking the SEC’s approval to launch a spot Bitcoin ETF include BlackRock and Fidelity.
In addition to the GBTC shares, ARK has sold a substantial number of Coinbase shares from its funds. This included 32,158 Coinbase shares from ARKW and 10,455 Coinbase shares from its ARK Fintech Innovation fund for a total of $3.4m.
The firm has also been seen simultaneously increasing its investment in Robinhood shares, adding 32,158 worth $300,000 to ARKW on 23 October.