• Mon. Jun 24th, 2024

ARK Drops GBTC Shares Prior to Proposed Spot BTC ETF Approval

Maria Bartiromo

ByMaria Bartiromo

Dec 29, 2023

The latest update says that Cathie Wood’s ARK Invest has formally parted ways with the Grayscale Bitcoin Trust (GBTC) by selling off all its assets, marking a dramatic shift in the company’s cryptocurrency portfolio. The $200 million move was made just before the expected January debut of spot Bitcoin exchange-traded funds (ETFs).

A change in ARK Invest’s strategy for handling Bitcoin exposure is evident from the purposeful reinvesting of $100 million of the proceeds into the ProShares Bitcoin Strategy ETF (BITO). The choice to switch from GBTC to the ProShares Bitcoin Strategy ETF aligns with ARK’s flexible investment approach.

Thus development adjusts to the changing market for digital currency financial products. When the price of Bitcoin shot up to $34,000 in October, ARK Invest slowly started to sell off its shares of GBTC.

ARK Invest to Sell Off it’s Remaining GBTC Shares

For a considerable time, institutional investors who want exposure to Bitcoin without holding the cryptocurrency directly have turned to Grayscale Investments’ Grayscale Bitcoin Trust. But with new chances and benefits coming into play with spot Bitcoin ETFs, ARK Invest has decided to relocate its cryptocurrency assets.

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The latest shift in ARK investment is coming when there’s a growing story about the Securities and Exchange Commission (SEC)’s intention to approve the spot BTC ETF applications, which will usher in an official bitcoin ETF in the United States. News says that Ark 21Shares and Grayscale officially filed ETF documents to the SEC, accompanied by several meetings and negotiations.

Recall that Barry Silbert resigned sometime last week as Grayscale’s CEO, which experts say is in preparation for the company’s ushering in of the new product. This event also increased industry watchers’ suspicion that the spot BTC ETF will likely be approved by January 2024.

ARK’s Decision Continues to Generate More Attention As Preparation Continues

Introduced in October 2021, the ProShares Bitcoin Strategy ETF (BITO) is designed as a futures-based ETF, giving investors exposure to fluctuations in the price of Bitcoin through financial derivatives. Balchunas from Bloomberg has predicted a 90% chance of DEC approving the BTC ETF by January 10, 2024.

The anticipated approval is expected to be significant in the cryptocurrency industry because the commission has denied almost all applications in past years.  This significant move is coming one month before the announcement that GBTC ranks ARK Invest’s top investment portfolio. Investigations show that ARK has already started selling its GBTC assets in October, releasing all the GBTC in its possession as BTC makes a significant move to $34,000. 

Investors Adjust Their Position, Await the Arrival of Spot BTC ETF 

The innovative CEO and creator of ARK Invest, Cathie Wood, has been a strong supporter of financial market innovation, and her choice to transfer money from GBTC to BITO is in line with ARK’s mission to be at the forefront of cutting-edge investment opportunities and disruptive technology.

The action fits into a larger pattern in the cryptocurrency market, as institutional investors adjust their approaches in reaction to new financial products and a changing legal environment. The choices made by major participants in the cryptocurrency space, such as ARK Invest, as the market moves into a new year will probably shape its dynamics and define the direction of the sector in 2024.

Maria Bartiromo

Maria Bartiromo

Maria Bartiromo is a renowned news writer and journalist, celebrated for her insightful reporting and authoritative voice. With a career spanning years, she has established herself as a trusted source of accurate and comprehensive news analysis, keeping readers informed on vital global developments.

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