Cathie Wood, CEO of the Ark investment fund, makes new predictions and buys back bitcoin (BTC), or rather GBTC. In 2021, she predicted a bitcoin at $500,000. Now she’s aiming for a million. The collapse of bitcoin (BTC), well below 20,000 dollars, and the successive disasters did not shake the optimism of Cathie Wood, a great figure in the investment. She just bought back 176,945 shares in Grayscale’s Bitcoin Trust (GBTC) fund.
Who is Cathie Wood?
Cathie Wood, born in 1955, has 40 years of experience in finance: she is an investment star. She is the founder and manager ofARK Investwhose assets under management amount to billions of dollars. In 2021, she predicted bitcoin (BTC) at $500,000. Now she predicts it will reach one million in 2030. Cathie Wood is recognized as a very influential money manager: her company invests in stocks that she predicts will double in value over five years. Ark Invest’s fund has recorded an average annual return of almost 45% over the past five years. Cathie Wood’s opinion is therefore particularly followed and her two recent purchases of GBTC represent a very positive signal for bitcoin (BTC).
Ark Investments and bitcoin with Grayscale sauce: GBTC
Ark investments publishes its investments on its site, and we can clearly see the last two in GBTC, on November 15 and 22, 2022. In total, Ark now holds nearly 6.357 million GBTC shares, representing 0.4% of the company’s total investments. The current value of its GBTCs is estimated at $55 million. GBTC shares traded at a discount of 45% below their net asset value. A probably bold bet, as Grayscale currently refuses to reveal its reserves as the crypto exchanges are currently doing. Grayscale is said to be the largest bitcoin holder in the world (after Satoshi Nakamoto) and would not be in trouble despite the setbacks of its subsidiary Genesis, which has $175 million locked up on FTX and a billion to be found to bail out its accounts.
Does Grayscale really hold 634,000 bitcoins?
Launched in September 2013, GBTC is a security that offers certain investment funds a way to gain exposure to bitcoin without actually buying it. It is therefore Grayscale which holds the bitcoins (or not?) and not its investors. Following the fall in GBTC shares, many investors are questioning the management of their funds, and Grayscale published a press release on November 18 to reassure them.
Grayscale’s parent company is Digital Currency Group and has already bought back GBTC shares as a document from the DRY : “ Digital Currency Group, Inc. (“DCG”), the parent company of Grayscale Investments, LLC, has authorized DCG’s purchase of shares of Grayscale Bitcoin Trust (OTCQX: GBTC) for a total value of $1 billion “. (October 2021).
We can therefore legitimately wonder if the parent company, which also owns Genesis and Coindesk (among others), does not buy back its shares to support the course (in vain). If Grayscale were to sell bitcoin to support Genesis, then one would expect a crash in the price of bitcoin.
Is Cathie Wood making the right choice buying GBTC en masse at discount prices? His fund would be the largest holder of GBTC (after DCG). Does it buy back to support the course? Since the incredible fall of FTX, unimaginable not long ago, we no longer know who to trust… Does Grayscale still have as many bitcoins? Will we have to sell it to save Genesis? We are literally living a real soap opera, exciting, but also impacting many small investors. The bear market is likely to be long, very long…
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