Cathie Wood’s ARK continues to sell Grayscale Bitcoin Trust

Cathie Wood’s ARK Next Generation Internet ETF (ARKW) continues to sell shares in both Grayscale Bitcoin Trust (GBTC) and Coinbase (COIN). 

The sales began in mid-August and are still ongoing, although they have accelerated in recent days. 

Cathie Wood: ARK’s Bitcoin sales trend 

CathiesArk.com publishes an up-to-date chart of the shares of GBTC held by ARKW. 

Although CathiesArk.com is not an official site, the data on it is public, so it is a reliable and verifiable source. 

The graph shows the changes over time in the number of GBTC shares held by Ark, not their market value. 

The peak was reached in July 2021, at the height of the bull run, when they held more than 9 million shares. At that time, the price of Bitcoin was around $35,000. 

Later, thanks to the further rise in the price of BTC, they began to sell some, until they fell to just under 8 million at the time of BTC’s historic peak. 

In early 2022, they started selling again, falling to 6.2 million in February. 

They resumed selling in August, but in November, with the collapse of the bitcoin price due to the bankruptcy of FTX, they started buying, until the number of BTC shares held rose back to 6.6 million. 

In mid-December last year, they started selling again, and continued to do so until May 2023, bringing them back down to 5.3 million. 

At the end of August they launched a new sales campaign, which is still ongoing. 

In particular, since 16 October they have fallen from 5.16 million to the current 4.89 million, with a total of 1.8 million sold in the last two days alone (Monday and yesterday).

Coinbase’s sales

The COIN shares held by ARKW are a different matter. 

In fact, the all-time high was reached in July of this year, with 1.7 million shares. They started to reduce their exposure in mid-July, and this process is still ongoing. 

In the last few days in particular, they have dropped from 1.42 to 1.36 million shares, reducing exposure by $1.7 million. 

It should be remembered, however, that at the beginning of the year the total number of COIN shares held by Ark Invest was 1.37 million, so during 2023 they first increased the share of Coinbase shares and reduced that of Grayscale Bitcoin Trust, and then reduced both. 

The ARK Next Generation Internet ETF currently holds 10.5% of its assets in GBTC shares, and just over 9% in COIN. GBTC however is still the main asset composing the basket of this ETF, and COIN the second. Third is ROKU with 7.4%. 

Coinbase shares, however, are also part of the basket of other Ark funds, in particular the ARKK Innovation ETF, which holds no less than seven million. Just over one million shares are also held in ARKF FinTech Innovation ETF.

In total, all Ark Invest ETFs together hold 9.5 million Coinbase shares, down from 11.4 million in June. 

In contrast, GBTC shares are only held by ARKW Next Generation Internet ETF.

Reasons for the sales

There is speculation that ARK Invest is taking advantage of the bullish sentiment to sell GBTC shares and rebalance its portfolio with Coinbase and Robinhood shares. 

It should be noted that recently, thanks to Grayscale’s victory against the SEC, the discount to NAV of the Grayscale Bitcoin Trust has shrunk quite a bit, from 43% in June to 13% today. 

In fact, the GBTC share price has risen from $8 at the end of 2022 to $26 today. 

Given this growth, it is more than logical for the fund to sell GBTC shares in order to rebalance the distribution percentages of the basket. 

Over the same period, Coinbase shares, for example, have risen from $36 to $82, a much smaller percentage increase: while GBTC shares have risen a resounding +220%, COIN shares have risen an excellent +120%. At this point, a rebalancing of the fund’s basket is fully justified, not least in order not to increase GBTC’s share of the basket too much.