Cathie Wood’s technology-focused investing firm, Ark Invest, has bought into Grayscale’s Bitcoin Trust (GBTC) after the world’s biggest digital asset fund hit another record-low discount last week.
On Monday, Ark Investment Management acquired 315,000 GBTC shares for its ARK Next Generation Internet exchange-traded fund, totaling approximately $2.8 million (ARKW).
Since July 2021, when Bitcoin fluctuated around a local bottom of about $30,000 before soaring to $69,000 later that year, Ark’s purchase represents its first investment in the trust. Similarly, following the failure of the cryptocurrency exchange FTX, Bitcoin hit a 12-month low of $15,682 last week.
Grayscale’s Bitcoin assets are worth $14.87 per share, whereas GBTC shares are currently selling for just $8.95 each, representing a 40% discount.
Shares of Grayscale’s trust cannot be instantly redeemed for a predetermined quantity of Bitcoin, unlike Bitcoin spot ETFs. This can result in significant price deviations between share prices and the value of the underlying Bitcoin.
The Securities and Exchange Commission (SEC) and Grayscale are engaged in a legal dispute over Grayscale’s attempt to turn its fund into a spot ETF, which would soon abolish the existing discount. This indicates that current share buyers would soon see a 40% increase in the value of their investment.
Ark Invest has fared poorly in 2022, losing 58% so far this year. Its CEO, Cathie Wood, expressed enthusiasm for Bitcoin as a universal, rule-based monetary system and forecast that its price per coin might one day reach $1 million.
