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In an unexpected strategic shift, Ark Invest has sold its remaining shares in the Grayscale Bitcoin Trust, as the investment world eagerly anticipates the U.S. Securities and Exchange Commission’s (SEC) potential approval of a spot Bitcoin Exchange-Traded Fund (ETF). This move is particularly notable as Grayscale, the world’s largest Bitcoin Trust, is also in the process of seeking approval to convert into an ETF, adding an intriguing dimension to the evolving cryptocurrency sector.
The divestment by Ark Invest occurs at a pivotal time when the cryptocurrency community is abuzz with the possibility of a spot Bitcoin ETF. However, CryptoQuant, a data provider, cautions that Bitcoin might face a substantial correction, potentially dropping its value to around $32,000 soon.
Ark Invest Makes a Strategic Move Away from Grayscale Amidst BTC ETF Speculation
.@CathieDWood explains the decision ARK Invest has made to pivot away from GBTC, and toward the ProShares Bitcoin Strategy ETF (BITO). pic.twitter.com/A7nTyOrAOi — TFTC (@TFTC21) December 28, 2023
Ark Invest has made headlines by liquidating its holdings in the Grayscale Bitcoin Trust, coinciding with critical moments for investors who are awaiting the SEC’s decision on a spot Bitcoin ETF, expected by January 10, 2024. Grayscale is also striving to convert its Bitcoin Trust into an ETF, further stirring interest in the market.
Reports from Bloomberg indicate that the ARK Next Generation Internet ETF, managed by Cathie Wood, has offloaded all 2.25 million of its shares in the Grayscale Bitcoin Trust. Concurrently, Ark Investment Management LLC purchased a significant stake in the ProShares Bitcoin Strategy ETF, becoming the fund’s second-largest holder.
This strategic shift by Ark Invest draws attention, especially as Bitcoin’s value has seen a significant uptick, doubling throughout 2023. This growth aligns with expectations of an imminent approval of spot Bitcoin ETFs by the SEC.
MicroStrategy has acquired an additional 14,620 BTC for ~$615.7 million at an average price of $42,110 per #bitcoin. As of 12/26/23, @MicroStrategy now hodls 189,150 $BTC acquired for ~$5.9 billion at an average price of $31,168 per bitcoin. $MSTR https://t.co/PKfYY59sTW — Michael Saylor⚡️ (@saylor) December 27, 2023
Ark Invest’s move away from the Grayscale Bitcoin Trust, previously a major asset in its portfolio, signals a change in strategy in response to the market and regulatory changes. In contrast, MicroStrategy continues to bolster its Bitcoin holdings, acquiring an additional 14,620 BTC for $615.7 million, as per their SEC filing. This acquisition underlines MicroStrategy’s steadfast belief in Bitcoin’s long-term potential, cementing its position as a key institutional player in the digital asset arena.
Bitcoin’s Potential Correction amidst ETF Approval Speculation
CryptoQuant warns of a potential significant correction in Bitcoin’s value, possibly dropping to $32,000, amidst the anticipation of a spot Bitcoin ETF approval. This prediction stems from historical “sell the news” events and current unrealized profit margins among short-term Bitcoin holders.
The approval of a spot Bitcoin ETF, considered a bullish event, may attract institutional investment, but CryptoQuant’s analysis indicates potential short-term unsustainability in Bitcoin’s current price. Capriole Investments echoes this sentiment, advising caution in portfolio management due to the increased risk associated with Bitcoin in light of the potential ETF approval.
Historically, Bitcoin has experienced similar “sell the news” scenarios, notably in 2017 and 2021, following significant market events like the CME listing of Bitcoin futures and Coinbase’s IPO, respectively.
As the SEC’s decision on the spot ETF looms, the Bitcoin market faces a mix of excitement and caution, with investors and traders closely monitoring the potential for significant price corrections and market volatility.
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