Published: Dec. 28, 2023 at 12:55 p.m. ET
One of Cathie Wood’s exchange-traded funds has sold all its holdings of Grayscale Bitcoin Trust over uncertainty around whether the trust’s conversion to an ETF would be approved.
Wood’s ARK Next Generation Internet ETF ARKW sold its remaining 2.25 million shares of the Grayscale Bitcoin Trust GBTC on Wednesday and bought 4.32 million shares of ProShares Bitcoin Strategy ETF BITO, which is based on bitcoin futures, according to the fund’s daily updates.
The…
One of Cathie Wood’s exchange-traded funds has sold all its holdings of Grayscale Bitcoin Trust over uncertainty around whether the trust’s conversion to an ETF would be approved.
Wood’s ARK Next Generation Internet ETF
ARKW
sold its remaining 2.25 million shares of the Grayscale Bitcoin Trust
GBTC
on Wednesday and bought 4.32 million shares of ProShares Bitcoin Strategy ETF
BITO,
which is based on bitcoin futures, according to the fund’s daily updates.
The move happens ahead of a Jan. 10 deadline for the U.S. Securities and Exchange Commission to make a decision on the spot bitcoin ETF application filed by Wood’s ARK Investment Management and 21 Shares.
Several other bitcoin ETF applications filed by BlackRock
BLK
,
Fidelity , Invesco
IVZ
,
VanEck and others are also pending the SEC’s approval.
Many market participants expect the SEC to approve ARK’s bitcoin ETF and other similar products by the deadline.
Still, Wood said ARKW sold its Grayscale holdings “out of an abundance of caution,” as they are not sure if the conversion would be approved in early January. “It’s just a moment of uncertainty between now and January 8th to 10th,” Wood told Bloomberg TV in an interview.
In August, a federal appeals court ordered the SEC to vacate its rejection of Grayscale’s conversion into a bitcoin ETF.
Wood said ARKW chose to maintain its exposure to bitcoin through BITO for now, as there are tax and regulatory uncertainties facing spot bitcoin ETF applications. “We don’t know exactly who’s going to be approved and whether they’ve met all the criteria that the SEC has put before us,” Wood said.
Grayscale’s Barry Silbert on Tuesday resigned as chair, the company said in regulatory filing without disclosing reasons.
However, Wood said bitcoin’s rally this year and the reduction of the gap between GBTC’s price with its net asset value meant “double good news” for ARK. GBTC’s discount to its net asset value, or the price of its bitcoin holdings, narrowed to around 6.9% on Wednesday from over 40% in June.
Bitcoin has surged over 160% so far this year, while still down almost 40% from its peak in 2021, according to CoinDesk data.
As traders position for a spot bitcoin ETF approval, MicroStrategy on Wednesday acquired an additional 14,620 bitcoin for about $615.7 million, pushing its total bitcoin holdings to about 189,150, according to the company’s chief executive, Michael Saylor.
