Cathie Wood’s Ark Invest has been one of the leading providers of spot Bitcoin ETFs. On Thursday, January 25, Ark Invest purchased a staggering 94,918 shares of the ARK 21 Shares Bitcoin ETF.
Ark Invest Bets on Its Own Bitcoin ETF
According to Ark Invest Daily data, Cathie Wood’s ARK Invest engaged in strategic transactions on January 25, purchasing 94,918 shares of the ARK 21 Shares Bitcoin Spot ETF, equivalent to approximately US$3.78 million.
Simultaneously, Wood’s firm executed a sell-off, divesting 198,873 shares of the ProShares Bitcoin Futures ETF, amounting to approximately US$3.82 million. These tactical moves by Cathie Wood underscore the dynamic decision-making within Ark Invest as they navigate the evolving landscape of the cryptocurrency market.
Cathie Wood and Ark Invest’s trade activity from today 1/25 pic.twitter.com/nV5WtIKoBn
— Ark Invest Daily (@ArkkDaily) January 26, 2024
Ark Invest has been doing major reshuffling to its portfolio over the last two months. While selling some of its major holdings in crypto firms like Coinbase and Block Inc. Ark Invest has liquidated more than 300K shares of Coinbase (NASDAQ: COIN) to increase its exposure to Bitcoin products as well as Tesla.
Along with purchasing its own Bitcoin ETF, Ark Invest purchased 29,624 shares of Tesla Inc (NASDAQ: TSLA).
Why Is BTC Price Dropping Despite Strong ETF Inflows?
The Bitcoin price has been facing strong selling pressure with the BTC price dropping under $40,000 earlier this week. BTC experienced a 0.27% decline on Thursday, partially reversing the 0.37% gain observed on Wednesday. The day concluded with BTC settling at $39,981.
Investors remain confused as to why is the BTC price falling despite strong inflows in the spot Bitcoin ETF. In a recent observation, Bloomberg Intelligence ETF analyst James Seyffart emphasizes the nuanced role of Exchange-Traded Funds (ETFs) in the cryptocurrency market, specifically in the context of Bitcoin.
Seyffart contends that while ETFs now represent a substantial portion of the market, they should not be viewed as the market itself. He points out that Bitcoin ETF inflows can coincide with declining Bitcoin prices, and conversely, outflows can align with rising prices. Seyffart suggests that this dynamic should not be perplexing, drawing parallels with other asset classes like equities, bonds, or gold.
Don’t know who needs to hear this. But ETFs aren’t THE market themselves. Yes they’re now a big slice of the pie but there’s a lot more to the pie. Bitcoin ETF inflows can coincide with falling #bitcoin prices. Outflows can coincide with rising prices. Shouldn’t be confusing?
— James Seyffart (@JSeyff) January 25, 2024
The analyst clarifies that funds, including ETFs, constitute only a subset of the larger supply and demand balance that determines prices in the market. On the other hand, the outflows from Grayscale have slowed down while BlackRock Bitcoin ETF continues to garner strong inflows.
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