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Cathie Wood Jumps Into Bitcoin Futures ETF and Ditches Grayscale

(Bloomberg) — One of Cathie Wood’s funds made a massive shake-up of its Bitcoin holdings, selling its remaining position in the Grayscale Bitcoin Trust due to uncertainty over its ability to convert successfully in a stock exchange. negotiated fund.

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The ARK Next Generation Internet ETF sold all of its remaining 2.25 million shares of the Grayscale Bitcoin Trust on Wednesday, according to data compiled by Bloomberg. The same day, she purchased 4.32 million shares of the ProShares Bitcoin Strategy ETF, which invests in Bitcoin futures, according to the investment firm’s daily data, making her the second-largest holder of the funds.

The holdings shakeup comes amid an industry race to gain U.S. regulatory approval for the first ETF to invest directly in the largest cryptocurrency. Wood told Bloomberg Television that the decision was made “out of an abundance of caution” in case the Grayscale trust’s conversion to an ETF was not approved by U.S. regulators by early January, when many observers expect it to be that the Securities and Exchange Commission decides in favor. light the first American spot-Bitcoin ETF.

She also noted that the Grayscale trust’s previous steep discount to its net asset value had reduced significantly, which was “double good news for us” when combined with the increase in its price.

The SEC faces a Jan. 10 deadline to decide whether to approve a one-time Bitcoin ETF application filed by Wood’s ARK Investment Management LLC and 21Shares, and potentially other similar filings. “We think the odds have increased because the SEC has been very engaged compared to what was happening before,” Wood told Bloomberg TV on Thursday. However, she cautioned that approval is “not 100% certain”.

“We don’t know exactly who will be approved and whether they meet all the criteria that the SEC has given us,” she said. “We are more bullish than ever on Bitcoin.”

Ark has reduced its holdings in the Grayscale Bitcoin Trust — which was once the largest holding of ARK Next Generation Internet ETF — in recent months, even as Bitcoin hit its highest level since April 2022. The cryptocurrency has more than doubled in 2023, with much of the gains coming towards the end of the year, amid speculation that the SEC would finally approve spot Bitcoin ETFs early next month.

Bitcoin fell 2.1% to $42,472.50 as of 5 p.m. in New York, while the Grayscale Bitcoin Trust closed 4% lower.

Earlier this week, Grayscale Investments said Barry Silbert, founder and CEO of its parent company Digital Currency Group, who was embroiled in legal disputes, had resigned as chairman and would be replaced by Mark Shifke, DCG’s chief financial officer. The board shakeup was seen by some as a positive step by Grayscale toward obtaining SEC approval to convert its fund into an ETF.

Wood introduced the Grayscale Bitcoin Trust as his top pick at the Sohn Australia conference last month.

Also on Wednesday, the ARK ETF bought 20,000 shares of the ARK 21Shares Active Bitcoin Futures Strategy ETF and sold 148,885 shares of crypto exchange Coinbase Global Inc., according to the fund’s report.

The ARK Next Generation Internet ETF is up 103% for the year, compared to a 55% advance in the Nasdaq 100 index. However, the fund’s trajectory has been volatile: it has fallen 67% in 2022.

–With help from Denitsa Tsekova, Katie Greifeld and Carol Massar.

(Adds moves in Bitcoin and GBTC in eight paragraphs.)

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