Cathie Wood, Ark Investment Management LLC’s star fund manager and founder, has overhauled her Bitcoin-related holdings in one of her flagship exchange-traded funds (ETFs). The ARK Next Generation Internet ETF (ARKW) sold all of its shares in the Grayscale Bitcoin Trust (GBTC) on Wednesday, December 27, 2023.
GBTC is a private trust holding Bitcoin and issuing shares that trade on the over-the-counter market. It used to be the top holding of ARKW, accounting for more than 10% of its portfolio at one point. However, Wood has been reducing her exposure to GBTC recently, as the trust has been trading at a significant discount on its net asset value.
Instead of GBTC, Wood has opted for the ProShares Bitcoin Strategy ETF (BITO), which is the first US-listed ETF that tracks the price of Bitcoin futures contracts. According to Ark’s daily data, ARKW bought 4.32 million shares of BITO on Wednesday, making it the second-largest holder of the fund.
BITO, which was launched in October 2021, has attracted more than $1 billion in assets under management in less than three months. It offers investors a more convenient and cost-effective way to gain exposure to Bitcoin without the hassle of buying and storing the cryptocurrency directly.
Wood has also expressed optimism about the potential approval of spot Bitcoin ETFs by the US Securities and Exchange Commission (SEC) in January 2024. Spot Bitcoin ETFs would track the actual price of Bitcoin rather than its futures contracts and would provide investors with a more direct and accurate exposure to the cryptocurrency.
ARKW Leads ETFs Returns In 2023
ARKW, which has more than $1.650 billion in assets under management, is one of the best-performing ETFs in 2023, with a return of 103%. The fund has outperformed the Nasdaq 100 Index, which has gained 55% in the same period.
Besides BITO, ARKW’s other top holdings include Tesla Inc., Roku Inc., Twitter Inc., and Spotify Technology SA. The fund also invests in other innovative sectors, such as cloud computing, artificial intelligence, blockchain, and biotechnology.
On Wednesday, ARKW also bought 20,000 shares of the ARK 21Shares Active Bitcoin Futures Strategy ETF (ABIT), which is another Bitcoin futures ETF managed by Ark. However, the fund sold 148,885 shares of Coinbase Global Inc. (COIN), the largest US-based cryptocurrency exchange, according to its report.
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