Benzinga - Ark Investment Management, led by well-known investor Cathie Wood, sold more than 700,000 shares of Grayscale Bitcoin Trust (GBTC) last month. The holdings equate to more than $21 million and were offloaded under Ark's Next Generation Internet exchange-traded fund (ETF) (ARKW). This is a significant portion of the fund’s $1.14 billion in holdings, so it is worth considering the underlying reasons.
Ark is an asset management company that offers a variety of securities, ranging from technology-driven ETFs to crypto and private equity. It focuses on finding innovative and disruptive technologies. Founded in 2014, it has nearly $7 billion in assets under management (AUM), making it one of the largest asset managers in the world.
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Ark may have sold the shares for a few reasons — most likely being that it was taking profits. GBTC is up more than 267% year to date, and ARKW also has performed well. Ark is known to take profits when its positions are doing well, so this could be a similar situation.
Another possible reason for the sale is that Ark believes its ETF will get approval, so it wants to unload its GBTC position in order to buy its issued ETF. While this explanation is a bit more theoretical, it would point toward Ark's bullishness on both its own spot Bitcoin ETF and Bitcoin in general.
Yet another explanation is that Ark and Woods are becoming less bullish on crypto in general. The main point of reasoning behind this argument is the recent arrest of former Binance CEO Changpeng Zhao (CZ). Binance was fined $4.3 billion last week after it was found guilty of violating anti-money-laundering laws. Binance is one of the most prominent crypto trading platforms, so the ruling was a blow to the crypto community. Woods has expressed her bullish sentiment surrounding crypto and Bitcoin, so this reasoning is perhaps unlikely.
Overall, there are a handful of reasons that ARKW reported large sales of GBTC over the past several weeks. Some explanations are simple and revolve around profit-taking and past tendencies, while others take into account the current complexity of the crypto sphere.
Grayscale has applied to convert its GBTC ETF into a spot ETF. Ark and 21Shares also have applied for their own spot Bitcoin ETFs. Some predict that approvals will begin rolling out early next year.
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