Earlier today, Cathie Wood, Founder, CIO, and CEO at ARK Investment Management, LLC (aka “ARK” or “ARK Invest”), gave an interview to Bloomberg where she detailed the strategic changes in the ARK Next Generation Internet ETF. In a significant move, ARK Invest sold its remaining 2.25 million shares of the Grayscale Bitcoin Trust (GBTC) and purchased 4.32 million shares of the ProShares Bitcoin Strategy ETF.
Wood explained that this decision was driven by a combination of regulatory and tax uncertainties surrounding GBTC. Notably, the discount between GBTC and its Net Asset Value (NAV) had narrowed significantly, from as high as 50% last year to single digits now. This narrowing discount was a key factor in ARK’s decision to shift its investment.
The move reflects ARK’s cautious approach amid the current regulatory environment. Wood emphasized the importance of regulatory certainty, which ProShares Bitcoin Strategy ETF, tracking Bitcoin futures, currently provides. This ETF is already approved, eliminating the regulatory uncertainty that surrounds other products, including GBTC.
Wood also discussed the potential approval of a spot Bitcoin ETF, which ARK Invest has been actively pursuing. She expressed optimism about the approval probabilities, citing increased engagement from the SEC. Wood mentioned that the SEC’s detailed inquiries and follow-up questions are positive indicators of their interest in approving such products.
Despite the shift in investment vehicles, Wood remains optimistic about Bitcoin’s future. She highlighted that ARK’s decision was out of an abundance of caution and not a reflection of a change in their outlook on Bitcoin. The interview also touched upon the potential impact of these strategic moves on ARK’s investment performance.
On 26 Dec 2023, Wood gave an interview to CNBC, in which she had to say about the institutional interest in the U.S. for a spot Bitcoin ETF:
“Institutions don’t want to bother with custodying and tax issues and other infrastructure. They just want to be able to access quickly Bitcoin and other digital assets, we think, longer term. And so, if we’re right, a spot Bitcoin ETF will be the most liquid way to access exposure to Bitcoin. And I think that that liquidity and the ability to move in and out quickly is going to be important to institutions.“