Ark Invest, a prominent investment firm specializing in disruptive innovations, has liquidated a substantial portion of its holdings, parting ways with 42,613 Coinbase (COIN) shares and 100,739 Grayscale Bitcoin Trust (GBTC) shares. This divestment amounted to approximately $5.8 million, as reported in Ark Invest’s trading activity update today.
The transactions occurred through the ARK Next Generation Internet ETF (ARKW) and ARK Fintech Innovation ETF, according to sources. Notably, both COIN and GBTC had recently seen their stock prices surge, with COIN closing at $77.21 and GBTC closing at $24.70 on the previous trading day.
Profit-Taking Amid Bitcoin Optimism
These sales came on the heels of considerable enthusiasm in the cryptocurrency market, particularly in relation to Bitcoin’s price, which had exceeded $34,000, marking a one-day gain of over 12%. Market participants were increasingly optimistic about the potential approval of a Bitcoin spot exchange-traded fund (ETF).
In a significant development, BlackRock’s spot Bitcoin ETF, officially known as the iShares Bitcoin Trust, was listed on the Depository Trust & Clearing Corporation (DTCC), an organization responsible for clearing and settlement services for assets. Bloomberg ETF analyst Eric Balchunas noted that this marked the first time a cryptocurrency ETF had appeared on the DTCC. Notably, BlackRock’s ETF is among more than a dozen similar proposals currently under review by the U.S. Securities and Exchange Commission (SEC).
While the SEC had been delaying decisions on pending spot Bitcoin ETF applications in recent months, the DTCC listing signaled that regulatory approval for a Bitcoin spot ETF might be inching closer. Cathie Wood’s firm, Ark Invest, in collaboration with 21Shares, had also sought approval for their spot Bitcoin ETF product.
MicroStrategy’s Profits Soar
With Bitcoin surpassing the $34,000 mark, MicroStrategy’s substantial Bitcoin investment portfolio also recorded significant gains. The company holds 158,245 BTC, acquired at an average price of $29,870 per BTC. As a result, their Bitcoin holdings saw profits of approximately $748.5 million, given Bitcoin’s current trading value of $34,600.
This surge in profitability contrasts with MicroStrategy’s Bitcoin holdings, which had experienced losses of up to 45% at various points since the previous year. Only recently did they begin to turn a profit.
Bullish Momentum Amid Positive Signals
The cryptocurrency market, especially Bitcoin, has faced considerable challenges due to a series of impactful events, such as the LUNA/UST collapse, issues with Celsius, FTX, Three Arrows Capital, and the global economic recession. However, the tide has seemingly turned, with the upcoming Bitcoin halving and encouraging signs related to spot ETFs contributing to bullish momentum. Investors are now eyeing a potential altcoin bull run following Bitcoin’s recent rally.
Ethereum also enjoyed a 9.5% increase, hovering around $1,840, while Solana (SOL) broke the $30 resistance level. Several other altcoins joined the positive trend, with Mina (MINA) posting the most significant gains as its price surged by over 112% following Upbit’s listing announcement.
Spot Bitcoin ETF Approval Speculation
The prevailing speculation suggests that BlackRock might become the first company to secure approval for a spot Bitcoin ETF. BlackRock is the world’s largest asset manager, with over $10 trillion in assets under management and a strong track record in launching ETFs.
Grayscale, known for its Grayscale Bitcoin Trust, has achieved a significant legal victory against the SEC in its efforts to transform GBTC into a spot Bitcoin ETF. In July 2023, a federal court ruled that the SEC’s rejection of Grayscale’s application was arbitrary and capricious. Under this ruling, the SEC is required to reevaluate its decision and either approve Grayscale’s application or provide a more detailed explanation for its rejection.
While the SEC has been cautious about cryptocurrencies, the upcoming deadlines for spot Bitcoin ETF applications are approaching, with Ark Invest’s application due by January 10, 2024. Some predict that the SEC may approve multiple applications simultaneously. Numerous entities have submitted applications for spot Bitcoin trading offerings, but none have received SEC approval. The regulator had cited concerns about market manipulation and volatility as reasons for rejecting previous applications.
