Cathie Wood: Ark dumps 500K GBTC shares, adds Coinbase stock as Bitcoin recovers 40%

1 year ago

Cathie Wood's Ark Invest offloaded a chunk of its Grayscale Bitcoin Trust (GBTC) shares since November's Bitcoin (BTC) price lows, the latest information shows.

Cathie Wood's Ark short-term cautious connected GBTC

Ark Invest added 450,272 GBTC shares worthy $4.5 cardinal to its ARK Next Generation Internet ETF (ARKW) successful November 2022. At the time, GBTC was trading successful the $7.46-$9.48 scope versus $12.25 successful January 2023.

GBTC price, of course, recovered alongside Bitcoin, rising astir 40% from its November lows. The betterment successful January besides helped reduce the GBTC "discount" from astir 50% to 40%, according to YCharts.

Interestingly, the stock terms rebound coincided with a simplification successful ARKW's GBTC holdings by 500,000 shares, suggesting nett taking successful the abbreviated ter.

Moreover, Ark's simplification successful shares since November appears successful enactment with its officially "bearish view" connected the Grayscale Bitcoin Trust, arsenic mentioned successful its December report, which stated that:

"The Digital Currency Group (DCG) appears to beryllium 1 of the biggest questions marks successful the crypto manufacture astatine this time."

The institution besides expressed concerns about Genesis Global, a cryptocurrency lender owned by DCG. Genesis filed for bankruptcy portion claiming $1 cardinal to $10 cardinal successful liabilities to implicit 100,000 creditors.

Meanwhile, Grayscale has been incapable to person its Bitcoin spot into an ETF pursuing rejections from the U.S. Securities and Exchange Commission (SEC). As Cointelegraph reported, an support from the SEC could reset GBTC's discount to zero.

Nonetheless, arsenic of Jan. 23, GBTC's stock value successful Ark's portfolio has really accrued to 0.52% compared to its November 2022 debased of 0.35%.

Ark adds $17.6M successful Coinbase stock

Ark's selling of GBTC shares successful the past weeks coincided with accumulation of Coinbase (COIN) shares.

Cathie Wood's ARKW added 320,000 COIN shares (about $17.6 million) successful 2023. As a result, the Coinbase stock's value successful Ark Invest's combined ETF portfolios has reached astir 3.62% connected Jan. 23 versus 2.73% astatine the commencement of this year.

Overall, Ark appears to beryllium lone expanding its vulnerability to the Bitcoin market, peculiarly as Wood is good known for her consistent $1 cardinal BTC terms prediction by 2030.

Can the GBTC terms rally continue?

Similarly, Greenery Financial, an concern strategy firm, confirmed that it had shifted its GBTC vulnerability to ProShares Bitcoin Strategy ETF (BITO) owed to the above-mentioned risks astir DCG.

"Any atrocious news, beryllium it Cathie Wood selling retired of GBTC oregon DCG going bankrupt, volition spark the aforesaid fears and uncertainty - of uncertainty - and apt origin an enlargement of the discount erstwhile again," the steadfast warned successful its SeekingAlpha note, saying:

"With Bitcoin having nary existent catalyst successful the abbreviated word and plentifulness of imaginable downside catalysts, determination are plentifulness of risks present from the NAV broadside arsenic well."

Nonetheless Bitcoin and GBTC prices whitethorn support connected rallying done Q1 from a method perspective.

On the regular chart, GBTC has reclaimed its 50-day exponential moving mean (50-day EMA; the reddish question successful the illustration below) adjacent $9.68 arsenic support.

Upward momentum could spot it trial the 200-day EMA (the bluish wave) adjacent $15 if it continues to interval supra the 50-day EMA wave, akin to what happened successful March-April 2022.

The method upside people falls successful enactment with what Pat Tschosik, elder portfolio strategist astatine Ned Davis Research, predicts about the Grayscale Bitcoin Trust.

He argues that GBTC terms could not lone treble by mid-2023, but besides constrictive the extant discount spread with Bitcoin's spot price.

“We urge GBTC…as a mode to play Bitcoin due to the fact that it has a ‘potential NAV kicker rebate,’ which not lone means it would spell up if Bitcoin goes up, but besides closing its existent ample 35% rebate connected NAV,” Ned Davis Research said successful a enactment to clients.

This nonfiction does not incorporate concern proposal oregon recommendations. Every concern and trading determination involves risk, and readers should behaviour their ain probe erstwhile making a decision.

View source