ARK Invest offloads GBTC shares amid Grayscale’s Bitcoin ETF application battle

ARK Invest, investor Cathie Wood’s firm, sold 66,342 units of Grayscale Bitcoin Trust (GBTC) for $1.66 million, at a closing price of $25.07 on Oct. 28, 2023.

The price of Bitcoin (BTC) currently sits at $34,434.

ARK Invest capitalizes on market recovery

Recent reports indicate that Wood, who founded ARK Invest in 2014, has been reshaping her portfolio. Wood divested Grayscale Bitcoin Trust (GBTC) shares while acquiring shares in a cryptocurrency-related stock. 

On Oct. 28, the fund sold 66,342 units of GBTC, amounting to $1.66 million based on the closing price of $25.07. 

This sale aligns with the broader pattern of ARK Invest divesting GBTC shares, involving the sale of approximately $2.5 million in GBTC shares on Oct. 24.

Ark Invest also sold GBTC shares in three sessions that week. On Oct. 24, around $2.5 million worth of GBTC shares were sold, equivalent to approximately 2% of ARK’s holdings in the trust. The following day, Oct. 25, ARK Invest sold about $1.8 million of GBTC shares for the second consecutive day. These GBTC sales might be connected to the firm’s filing for a Bitcoin-based ETF.

Additionally, on Oct. 28, ARK Invest invested $12.4 million in a crypto-linked stock, the specific name of which was not disclosed. Besides this, ARK Invest has been actively purchasing shares in other companies. On Oct. 24, the fund acquired $2.4 million worth of shares in the popular trading platform Robinhood (HOOD).

Crypto ETF’s breaking barriers 

ARK Invest’s recent actions could be influenced by Bitcoin’s latest rally. The cryptocurrency’s value recently soared, reaching over $35,000 on Oct. 28.

The spike in Bitcoin’s price is also linked to a recent court ruling in the Grayscale and SEC legal battle and the approval of a spot Bitcoin ETF, which appears imminent, according to experts. 

The U.S. Court of Appeals for the DC Circuit ruling stated that the Securities and Exchange Commission (SEC) was mistaken in denying Grayscale, a major crypto investment firm, the opportunity to launch the first Bitcoin exchange-traded fund (ETF). This decision has broader implications, potentially affecting other companies like BlackRock and Fidelity, who are also interested in creating Bitcoin ETFs.

The ruling, which faced multiple delays, stemmed from the SEC’s rejection of Grayscale’s application last summer. However, the denial was based on Grayscale’s inability to address concerns related to potential market manipulation and investor protections. Importantly, the SEC does not intend to challenge the recent court ruling, acknowledging its error in rejecting Grayscale Investments’ application for a spot Bitcoin ETF.

This legal outcome has narrowed the discount on Grayscale Bitcoin Trust shares, underscoring the increased importance of the underlying asset’s price. Additionally, the ruling has opened the door for Bitcoin exchange-traded funds, indicating a positive shift in the regulatory landscape.

ARK Invest, in addition to divesting shares in Grayscale Bitcoin Trust, has been acquiring shares in Robinhood. Notably, Wood has previously expressed confidence in Grayscale Investments, recognizing its significance within Barry Silbert’s Digital Currency Group.