Ark Invest boss and renowned tech investor Cathie Wood is a long-time bitcoin evangelist but recent trades suggest she is reassessing her position on Grayscale Bitcoin Trust (GBTC), the largest bitcoin investment vehicle in the world.
Data shows that in the past two days, Wood has disposed of some $4.6 million worth of GBTC shares (if going by Tuesday’s closing price of $28.1 per share), following a round of sell-offs throughout October.
These disposals form part of a rejig of the ARKW portfolio, with further acquisitions of Twitter founder Jack Dorsey’s Block Inc (NYSE:SQ) mobile payments company recently logged, though GBTC still remains the largest holding in the ARK Next Generation Internet ETF (ARKW)
Wood’s GBTC exits follow a significant improvement in the performance of the beleaguered trust.
Earlier this year, GBTC, which is 100% invested in bitcoin, was at a near 50% discount to its net asset value (NAV) amid a grim crypto winter.
That discount has since closed to just 12% owing to a significant uptick in market sentiment on bitcoin.
GBTC’s discount stems from its status as a closed-ended fund, meaning it does not allow for share redemptions. As such, holders are forced to sell their shares on the open market if they wish to exit.
This has been a hard sell since the $2 trillion rout in the cryptocurrency markets in 2022.
Grayscale has long-held ambitions to convert its cornerstone trust into an exchange-traded fund, which would allow it to be traded on the stock exchange, which in turn would help to reduce its persistent discount.
US regulators have snubbed the idea, but recent events suggest that Grayscale’s wishes may soon be a reality.
Global asset-management titan BlackRock made similar filings to the US Securities and Exchange Commission (SEC), which has piled significant pressure on the SEC to reassess its position on bitcoin-based ETFs.
Ark Invest has also jumped on the bandwagon with its own spoit-biticon ETF filing.
This leads to the question: Given the prospect of GBTC soon closing its discount to NAV entirely, has Wood made the right decision to sell down her position in the trust?