ARK Invest Divests from Grayscale, Invests in ProShares Bitcoin ETF

By: Eliza Bennet

ARK Invest's Next Generation Internet ETF (ARKW) completely offloaded its positions in Grayscale's Bitcoin Trust (GBTC) on Dec. 27 and reinvested with a $92 million purchase in ProShares Bitcoin Strategy ETF (BITO). This marks a shift in ARK's investment strategy, as seen in their latest trade filing.

This move comes amid a recent selling spree that has seen several Bitcoin-related holdings like COIN stock by Coinbase on the chopping block as ARK attempts to realign its portfolio balance. In November, the fund divested more than 700,000 units of GBTC in anticipation of a potential approval of a spot Bitcoin ETF in the U.S. It should be noted that at the time, GBTC constituted more than 9% of ARKW's portfolio.

In addition to GBTC, ARK also let go of over $200 million worth of Coinbase stock, thus relieving its portfolio of around 500,000 units of COIN stocks just within the past week. It's important to note that COIN has been performing commendably this past year, boasting an increase of over 400% based on year-to-date data.

Interestingly, despite ARK's BTC spot ETF application currently under review, the firm went ahead to purchase BITO shares making it the fund's second-largest holder. Eric Balchunas, a senior ETF analyst for Bloomberg, believes this purchase may simply be a 'liquidity transition tool' that allows ARK to maintain a high beta with Bitcoin, additionally enhancing the ETFs' assets under management (AUM).