Ark Invest Sells Coinbase and Grayscale Shares Amid Crypto Rally

Jimmy Aki
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Cathie Wood-led Ark Invest sold approximately $5.8 million worth of shares in Coinbase and Grayscale Bitcoin Trust (GBTC) as the price of Bitcoin surged by more than 10%.

Ark Invest Takes Advantage of Crypto Surge

Ark Invest has garnered a reputation for its aggressive and forward-thinking investments in various sectors. This includes electric vehicles, genomics, and blockchain technology.

On October 23, the investment firm divested 42,613 shares of the US-based cryptocurrency exchange Coinbase through their ARK Next Generation Internet ETF (ARKW) and ARK Fintech Innovation ETF.

The shares of Coinbase sold by Ark Invest were worth approximately $3.3 million, given that the closing price stood at $77.21 on Monday evening.

In addition, the company also sold 100,739 shares of the Grayscale Bitcoin Trust (GBTC), valued at $2.48 million, with a closing price of $24.70.

This action coincided with Bitcoin reaching a record high of over $34,000. Ark Invest is the second-largest shareholder of GBTC, holding more than $130 million in the trust.

Furthermore, GBTC constitutes the top holding in ARKW, one of the firm’s funds aimed at actively investing in internet-related products and services, such as cloud computing, artificial intelligence, e-commerce, and media innovations, with about 10.42%.

Cathie Wood has previously voiced her confidence in Grayscale Investments. She trusts Grayscale’s commitment to cold storage, a security measure for safeguarding its Bitcoin holdings.

In addition, Wood has consistently expressed optimism about Bitcoin’s price, with Ark Invest projecting a price of $1.48 million for the asset by the end of the decade.

At press time, Bitcoin is trading just above $34,780, marking a 5.20% increase in the last 24 hours and a 21.48% increase over the past 7 days.

BTC_1D_graph_coinmarketcap

However, Ark Invest’s recent activities don’t end there. The firm has added 259,628 shares of Robinhood Markets Inc. through ARKW to their ETF, with a transaction value of $2.38 million and a closing price of $9.17 on Monday evening.

ARK is the second-largest institutional holder of Robinhood stock, with a 4.1% stake distributed across four of its exchange-traded funds.

On the other hand, Coinbase (COIN) constitutes 9.08% of the ARKW portfolio. As of Monday’s closing bell, COIN had witnessed a remarkable 130% increase since the beginning of the year, while GBTC had posted even more impressive gains, with a year-to-date increase of 201%.

A Change in Fortune

The recent upsurge in Bitcoin’s price can be attributed to a recent court ruling in the Grayscale and the Securities and Exchange Commission (SEC) legal disputes.

On October 23, the US Court of Appeals issued a directive to the SEC for the reconsideration of Grayscale’s application for a spot Bitcoin ETF.

This legal matter stems from a dispute initiated by Grayscale against the SEC in the previous year. The company’s legal action was in response to the SEC’s rejection of their request to convert their Grayscale Bitcoin Trust (GBTC) into a conventional Bitcoin ETF.

The firm contended that the SEC’s decision was unjust and irrational, especially considering the agency’s approval of similar Bitcoin futures ETF products.

This argument found unanimous agreement among the court’s judges in August 2023.

Following this ruling, the US regulator had a 45-day window to challenge the decision, but it opted not to take any action, allowing the deadline to pass earlier this month.

Consequently, a court order was issued, mandating a reevaluation of Grayscale’s application, and this reassessment has now taken place.

The SEC has repeatedly cited concerns related to market manipulation as the basis for its rejection or delay of applications for spot Bitcoin ETFs. These ETFs enable investors to gain exposure to the primary cryptocurrency without the necessity of physically holding it.

The pivotal question moving forward is whether the SEC will approve or reject the proposed conversion.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.