ARK's GBTC Sale May Signal Bitcoin ETF Optimism

In the latest sign of increasing optimism for a spot bitcoin approval, ARK Invest, the asset-management firm led by famed investor Cathie Wood, shed about $5 million worth of Grayscale Bitcoin Trust (GBTC) shares last week, amid a narrowing of the trust’s discount to 8.06%, its lowest in over two years as of Nov. 24.  

The investment firm’s ARK Next Generation Internet ETF (ARKW) sold about 163,000 shares in the past week, according to data from Bloomberg. The sales came as the price of bitcoin, which has nearly doubled this year, temporarily surpassed $38,000 for the first time in about a year and a half.  

Despite ARK offloading the shares, Bloomberg analyst Eric Balchunas clarified in a post on the X social-media platform formerly known as Twitter that he doesn’t think the move indicates a lack of bullishness on the part of ARK. 

“With ARK you gotta look at weightings history before you begin interpretation,” he tweeted in response to what he said was "another article on how ARK is selling GBTC and how that means they aren’t really bullish on BTC and/or they making room for ARKB. Neither is true."

Spot Bitcoin ETF Race

Last week, ARK was the first of the major firms to disclose a fee for their prospective spot bitcoin ETF, according to a filing. 

Many firms have recently added updates to their spot bitcoin ETF filings, including WisdomTree Investments on Nov. 16, signaling that conversations with the Securities and Exchange Commission are steadily progressing toward a potential approval.

The SEC, which delayed its decision in September, must decide on ARK's application by Jan. 11, the earliest deadline for a spot bitcoin ETF.

While the SEC has approved cryptocurrency ETFs that track digital asset futures, the largest being the ProShares Bitcoin Strategy ETF (BITO), the agency has thus far denied and delayed its decision on applications for ETFs that track physically backed cryptocurrency on the grounds of market manipulation. Despite investors excitement for a spot fund, the SEC has continued to delay its decisions on applications, most recently punting on a filing from Brazilian cryptocurrency firm Hashdex.  

Contact Lucy Brewster at [email protected].