Arc’s GBTC weight in the portfolio actually increased despite selling 500,000 shares of the fund in the past month.
Kathy Wood’s Arc Invest has offloaded part of its Grayscale Bitcoin Trust (GBTC) shares since November Bitcoin
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Prices are down, the latest figures show.
Short-term caveat on Cathy Wood’s Ark GBTC
Arc Invest added 450,272 GBTC shares worth $4.5 million to the ARK Next Generation Internet ETF (ARKW) in November 2022. At that time, GBTC was trading in the $7.46-$9.48 range while in January 2023 It was $12.25
GBTC’s value did recover along with Bitcoin, rising nearly 40% from its November lows. The January recovery also reduced GBTC’s “discount” by about 50% to 40%, according to YCharts.
GBTC daily pricelist. Source: TradingView
Interestingly, the stock price surged as ARKW decreased its holding in GBTC by 500,000 shares, indicating profitability in the short-term
Shares of GBTC in Arch’s ETF (purple) versus its price (orange). Source: Cathysarc.com
Furthermore, the decline in Arch shares since November appears to be consistent with an officially “bearish outlook” on Grayscale Bitcoin Trust, as stated in its December report, which states:
“Digital Currency Group (DCG) appears to be one of the biggest question marks in the crypto industry at the moment.”
The company also raised concerns about DCG-owned cryptocurrency lender Genesis Global. Genesis filed for bankruptcy claiming payments of between $1 billion and $10 billion to more than 100,000 creditors.
Meanwhile, Grayscale has been unable to convert its bitcoin trust into an ETF after the U.S. Securities and Exchange Commission (SEC) rejected it. As Cointelegraph reported, GBTC’s discount could be reset to zero with SEC approval.
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However, as of January 23, the weighting of GBTC shares in Ark’s portfolio has actually increased to 0.52%, compared to the November 2022 low of 0.35%
Weighting of GBTC shares across the Arc ETF (purple). Source: Cathysarc.com
Arch adds $17.6M to Coinbase stock
Over the past week, Ark’s GBTC shares were sold along with an accumulation of Coinbase (COIN) shares.
Cathy Wood’s ARKW added 320,000 COIN shares (approximately $17.6 million) in 2023. As a result, the weighting of Coinbase’s shares in Arch Invest’s combined ETF portfolio rose to about 3.62% on January 23 compared to 2.73 at the beginning of the year % was .
COIN participates in Arch’s ETF (purple) versus its price (orange). Source: Cathysarc.com
Overall, Ark only seems to be increasing its exposure in the Bitcoin market, especially since Wood is well known for its $1 million BTC value until 2030 on a continuous basis
Will GBTC prices continue to rise?
Similarly, investment strategy firm Greenery Financial confirmed that it has shifted its GBTC exposure to ProShares Bitcoin Strategy ETF (BITO) due to the aforementioned risks surrounding DCG.
The firm warned in its SeekingAlpha note that any bad news, whether it’s Cathy Wood selling out of GBTC or DCG going bankrupt, will likewise create fear and doubt – of uncertainty – and possibly lead to another discount:
“Bitcoin has no real catalysts in the short term and a lot of potential downside catalysts, so there’s a lot of risk here from the NAV side as well.”
Technically, however, Bitcoin and GBTC prices could continue to rise through Q1.
On the daily chart, GBTC regained its 50-day exponential moving average (50-day EMA; red wave in the chart below) near $9.68 as support.
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The upward momentum will test the 200-day EMA (blue wave) near $15 if it continues to float above the 50-day EMA wave, as it did in March-April 2022
GBTC daily pricelist. Source: TradingView
The technical upside target is a prediction from Pat Tskosik, senior portfolio strategist at Ned Davis Research, on Grayscale Bitcoin Trust.
They argue that GBTC could not only double in value by mid-2023, but also narrow the current discount gap with bitcoin’s spot price.
“I recommend GBTC…as a way to play bitcoin, because it has a ‘potential NAV kicker discount,’ which means if bitcoin goes up, it will go up, rather at its NAV,” Ned Davis said it will also close out the current big 35 % discount, Research said in a note to clients.
This article does not contain investment advice or recommendations. and of every investment and business