Ark Investment Management founder Cathie Wood loves bitcoin. She has a penchant for buying shares of bitcoin-related companies when the market starts to turn negative numbers. Ark recently went all-in on GrayScale and Coinbase. Why is that for?
Grayscale has recently been affected by the collapse of FTX. GBTC is a financial vehicle that allows investors to gain exposure to Bitcoin without buying and holding the asset. The Bitcoin backing GBTC is held in custody by Coinbase.
Yet, Ark believes in the future of GrayScale — that's why it spent $6M for a total of 760,000 shares of GrayScale Bitcoin Trust. Ark also bought 215,000 shares of Coinbase last Tuesday, November 22.
These purchases have everyone looking ARK's way. However, this is a standard strategy when it comes to investment. Low prices invite companies to invest and lower their average purchase price. Furthermore, Wood is a faithful believer in BTC, going so far as to predict that it will reach $1M by 2030.
This past week has been a roller coaster ride for bitcoin, hitting two-year lows. However, GrayScale is in the eye of the hurricane. Recently, Genesis and BlockFi halted customer withdrawals following the collapse of FTX.
GrayScale is in question because, like Genesis, they are owned by Digital Currency Group. And if Genesis is on the verge of collapse, what would stop GrayScale from going under as well?
However, Wood's investment is not a blind bet. Coinbase, amid the disaster, stated that they maintain custody of GrayScale's 635,000 BTC.
This is a measured risk decision. Cathie Wood believes strongly in BTC's future, and this is a bet on two of the crypto companies in the market. Ark's action is an endorsement of GrayScale. Big funds are helping big funds, after all.
