One of Cathie Wood’s exchange-traded funds has executed a massive shake-up in its Bitcoin-related holdings as the cryptocurrency rounds out a blockbuster year.
The ARK Next Generation Internet ETF sold all of its remaining 2.25 million shares of the Grayscale Bitcoin Trust on Wednesday, according to data compiled by Bloomberg. The same day, it bought 4.32 million shares of ProShares Bitcoin Strategy ETF, according to Ark Investment Management LLC’s daily data, making it the second-biggest holder of the fund.
Wood told Bloomberg Television that the firm sold the Grayscale Bitcoin Trust “out of an abundance of caution” in case its conversion to a spot-Bitcoin ETF is not approved by US regulators in early January, as many observers expect. Also, she said, the fund’s previous large discount to its net asset value has shrunken considerably, which was “double good news for us” when combined with its price increase.
“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,” she said. “We’re as optimistic about Bitcoin as we’ve ever been.”
Wood has been trimming her holdings in the Grayscale Bitcoin Trust — which used to be ARK Next Generation Internet ETF’s top holding — in recent months, even as Bitcoin rose to its highest level since April 2022. The cryptocurrency has more than doubled in 2023, with much of the gains coming toward year-end amid speculation that the US Securities and Exchange Commission will approve spot Bitcoin ETFs early next month.
Wood touted the Grayscale Bitcoin Trust as her top pick at the Sohn Australia conference last month.
Also Wednesday, the ARK ETF bought 20,000 shares of the ARK 21Shares Active Bitcoin Futures Strategy ETF and sold 148,885 shares of crypto exchange Coinbase Global Inc., according to the fund’s report.
The ARK Next Generation Internet ETF is up 103% for the year, compared with a 55% advance in the Nasdaq 100 Index. However, the fund’s path has been volatile — it fell 19% and 67% in 2021 and 2022, respectively.
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