ARK Invest’s Cathie Wood sells more than 700 000 Grayscale Bitcoin Trust shares in one month

What’s new? One of the exchange-traded funds (ETFs) of Cathie Wood’s ARK Invest has sold more than 700 000 shares of the Grayscale Bitcoin Trust (GBTC) since October 23. For example, on November 22 alone, the Ark Next Generation Internet ETF sold 36 168 GBTC securities. The transactions were carried out also against the background of the BTC exchange rate growth: on November 16, the asset approached $38 000, which became the maximum since May last year.

Bloomberg’s Material

What else is known? It is noteworthy that ARK Invest was the fourth largest holder of GBTC shares. According to Bloomberg as of September 30, the company owned 5,6 million securities of the trust. In addition, on November 17, Cathie Wood called GBTC the best asset in her company’s accounts during a speech at the Sohn Australia conference. ARK’s representatives did not respond to Bloomberg reporters’ request for comment on the sale of shares.

On November 23, the discount on GBTC shares relative to net asset value fell below 10% for the first time since July 2021. At the moment, the securities are not redeemable, but their rate has risen by 267% since the beginning of the year.

On the same day, Grayscale supplemented its application to convert GBTC into a spot ETF. Bloomberg’s analyst James Seyffart explained that this event in itself does not guarantee the approval of the application, but indicates the company’s active interaction with the U.S. Securities and Exchange Commission (SEC).

The regulator had previously rejected Grayscale’s application, but following a court case, that rejection was overturned and officials were required to reconsider it.

In mid-November, Grayscale CEO Michael Sonnenschein hinted at the imminent approval of a spot BTC-ETF, saying that “it's been a ten year dress rehearsal. we’re ready for the main event.”

In turn, analysts at JPMorgan bank believe that if a spot bitcoin-ETF is approved in the US, the Grayscale trust will face a $2,7 billion outflow of funds. So far, the SEC has not allowed any such product to enter the market. That said, cryptocurrency futures ETFs are allowed in the US.

As of November 24, GBTC holds 621 600 bitcoins worth $23,39 billion, according to The Block. GBTC is the largest holder of the first cryptocurrency among the funds.

ARK Invest is also awaiting SEC approval to launch a spot BTC-ETF. It has filed a joint application with 21Shares. If approved, the product will be available on Nasdaq, and the bitcoin custodian will be the US crypto exchange Coinbase. On November 20, the parties also supplemented the document, which analysts assessed as a sign of a productive dialog with the regulator.