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ARK Invest has just made a bold move by liquidating all its remaining holdings in the Grayscale Bitcoin Trust (GBTC), totaling a whopping $200 million. This decision came as a surprise since in the previous month, GBTC was the largest holding in ARK’s Next Generation Internet ETF. Could this be a strategic move by the institutional asset management firm to prepare for a speculated spot Bitcoin ETF approval by the SEC next month?
According to Bloomberg ETF analyst Eric Balchunas, ARK Invest used half of the proceeds from liquidating its GBTC shares, approximately $100 million, to invest in the ProShares Bitcoin Strategy ETF (BITO). However, the move is believed to be temporary, with ARK Invest expected to launch its own spot Bitcoin ETF next year, pending approval from the SEC. Until then, ARK appears to be using BITO as a “temporary parking spot.”
The decision to completely dump Grayscale holdings follows a gradual divestment that ARK Invest had started in October when Bitcoin reached $34,000. Since then, the firm has been slowly but steadily selling its GBTC shares. In addition to selling off its GBTC shares, ARK Invest also divested 148,885 Coinbase shares, valued at $27.5 million, from its ARK Next Generation Internet ETF (ARKW).
Notably, the latest move has propelled ARK Invest to become the second-largest holder of the Bito ETF. This strategic repositioning of ARK’s portfolio aligns with the broader anticipation and speculation surrounding the potential approval of a spot Bitcoin ETF.
Meanwhile, there have also been strategic moves by Grayscale Trust as the potential approval of a Bitcoin ETF looms. Barry Silbert and Mark Murphy resigned from Grayscale Bitcoin Trust’s parent company, Grayscale Investments. This was widely seen as a move to show compliance ahead of the potential approval of a Bitcoin ETF. The asset manager then amended its S-3 filing for the conversion of its GBTC into a spot Bitcoin ETF to comply with the SEC’s demands for cash-only creation for the fund redemptions.
To this end, it seems like ARK Invest and Grayscale Trust are making substantial strategic moves ahead of the potential approval of a Bitcoin ETF, with a lot resting on the SEC’s decision next month.