ARK Invest leans toward BITO, sells all GBTC before ETF decision

In the final week of 2023, as members of the crypto community eagerly awaited the introduction of a spot Bitcoin ETF (Exchange Traded Fund), Cathie Wood’s Ark Invest reportedly liquidated its entire holdings in the Grayscale Bitcoin Trust ($GBTC). According to a recent post by ETF expert and Bloomberg’s Eric Balchunas on X (formerly Twitter), Ark Invest, once a major $GBTC holder, made this significant shift in anticipation of potential developments in the spot Bitcoin ETF landscape.

Today ARK sold its entire remaining $GBTC position (it was ARKW's biggest holding only a month ago) and used half the money $100m-ish to buy $BITO, likely as liq transition tool to keep beta to btc while it legs into $ARKW or $ARKB. End of an era. h/t @DilksJay @funwithnumberz pic.twitter.com/J1i92qcmzo

— Eric Balchunas (@EricBalchunas) December 28, 2023

Ark Invest redirects funds from $GBTC to $BITO

However, a significant portion of the fund will be redirected to the ProShares Bitcoin Strategy ETF ($BITO). Ark Invest’s decision to relieve from $GBTC, formerly its largest holding, is seen as a tactical move ahead of the January 10, 2024, deadline for potential spot Bitcoin ETF approvals. 

Todayq News had earlier reported on the sell-off, speculating that it might be a strategic trick in response to the evolving regulatory landscape and the potential approval of Bitcoin ETF. Additionally, Balchunas disclosed that Ark Invest deployed around $100 million, or half of the proceeds from the $GBTC sale, to acquire shares of ProShares Bitcoin Strategy ETF ($BITO).

The reason behind ARK Invest’s complete sell-off of GBTC

This move is believed to be part of Ark Invest’s broader strategy, positioning $BITO as a liquid transition tool while awaiting potential approvals for ARK 21Shares Spot Bitcoin ETF ($ARKB) and ARK Next Generation Internet ETF ($ARKW).

The joint application by Ark Invest and 21Shares for a spot Bitcoin ETF was resubmitted on April 25, 2023, following several previous rejections by the U.S. Securities and Exchange Commission (SEC). 

With this strategic move, Ark Invest is now the second-largest holder of ProShares Bitcoin Strategy ETF ($BITO), reflecting its proactive approach to navigating the dynamic cryptocurrency investment landscape. As the crypto industry eagerly awaits regulatory developments, Ark Invest’s recent portfolio adjustments highlight its adaptability and foresight in managing its exposure to the evolving digital asset market.