ARK Invest, Cathie Wood’s asset management firm, made a strategic move by selling approximately two million shares of the Grayscale Bitcoin Trust (GBTC) on Wednesday. This decision aligns with the looming mid-January deadline set by the Securities and Exchange Commission (SEC) for the approval or rejection of Ark’s spot bitcoin ETF.
In preparation for the anticipated decision, Ark, aspiring to become a bitcoin ETF issuer, converted its GBTC holdings into shares of the ProShares Bitcoin Strategy ETF (BITO), totaling around $92 million. The ARK Next Generation Internet ETF (ARKW) mirrored this move by selling GBTC shares and acquiring BITO, positioning themselves optimistically ahead of the potential approval of a new spot bitcoin ETF.
Cathie Wood emphasized on Bloomberg TV that this shift was prompted by the belief that an already sanctioned ETF presents a more secure investment avenue compared to an ETF conversion still pending approval. Wood highlighted, “There’s no regulatory uncertainty associated with [BITO], so we opted to maintain our exposure through BITO for the time being.”
Spot Bitcoin ETF Prospects
The SEC’s pending decision on Ark’s spot bitcoin ETF remains set for a January 10 deadline. However, industry insiders speculate that if the SEC greenlights Ark’s proposal, it might approve multiple ETF applications simultaneously among the dozen currently under consideration. While the SEC permits funds tracking cryptocurrency futures, it has yet to authorize ETFs directly holding bitcoin.
Notably, the SEC faced a significant setback in August when a U.S. appeals court ruled against the regulatory body in a pivotal lawsuit brought by Grayscale. The court ruled that the SEC erred in preventing the Grayscale Bitcoin Trust’s conversion into an ETF. This legal development compelled the SEC to collaborate with potential ETF issuers to refine their applications, marking a turning point in the regulatory landscape.
