Cathie Wood’s ARK Invest Ditches GBTC for BITO, Becoming the Second-Largest Holder
Shrinking Discount of GBTC and ARK Invest’s Strategic Shift
The world’s largest Bitcoin trust, GBTC, has seen a significant narrowing in its negative premium rate. According to Coinglass, GBTC’s current discount rate has drastically reduced to -6.88%, the lowest since mid-2021. With this backdrop, Bloomberg ETF analyst Eric Balchunas revealed that ARK Invest, led by the renowned ‘female stock god’ Cathie Wood, has adjusted its investment positions: they have sold all remaining GBTC holdings in their ARKW fund and invested about $50 million in BITO (Bitcoin Futures ETF), making ARK Invest the second-largest holder of BITO.
Further reading：Robinhood’s Crypto Trading Volume Skyrockets, Ark Invest Ramps Up Investment
Purpose Behind the Strategy
This strategic change might be aimed at transitioning funds between different funds while maintaining sensitivity to Bitcoin price fluctuations. Analyst Balchunas commented on X:
He added that using a liquid ETF like BITO for portfolio transitions is a common strategy among institutional investors. It allows them to maintain market exposure while transitioning between investments and controlling risk. Therefore, this does not imply that ARK Invest is bearish on GBTC’s prospects.
Community Inquiry and GBTC’s Cash Model Adoption
A netizen inquired whether ARK Invest had indeed sold off GBTC as he hadn’t received any transactional emails regarding this. Balchunas responded that he inferred this from ARK Invest’s holding documents where GBTC’s weight in the ARKW fund became zero. He believed it made sense, given that BITO’s weight in the ARKW fund had risen to 5%.
Additionally, Grayscale has agreed to adopt the cash creation/redemption model preferred by the SEC for converting its GBTC into a Spot Bitcoin ETF, as pointed out by Bloomberg ETF analyst James Seyffart. Amidst legal controversies, Barry Silbert, founder of Grayscale’s parent company Digital Currency Group (DCG), resigned as a director of Grayscale, with DCG CFO Mark Shifke taking over. These moves are widely seen as efforts to boost the likelihood of their Spot Bitcoin ETF application being approved.
Further reading：GBTC’s Shift to Cash Redemption: A Potential Game-Changer in the Crypto ETF Space
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Keywords: ARK Invest, Cathie Wood, GBTC, BITO, Bitcoin Futures ETF, Spot Bitcoin ETF, SEC, Digital Currency Group, Eric Balchunas, Bloomberg
