Cathie Wood, CEO of the Ark investment fund, makes new predictions and buys back bitcoin (BTC), or rather GBTC. In 2021, she predicted one bitcoin at $500,000. She now she aims for a million. The collapse of bitcoin (BTC), well below $20,000, and the subsequent disasters have not shaken the optimism of Cathie Wood, a great figure in the investment. You just repurchased 176,945 shares of Grayscale’s Bitcoin Trust (GBTC) fund.
Who is Catie Wood?
Cathie Wood, born in 1955, has 40 years of experience in finance: she is an investment star. She is the founder and manager of ARK Invest, whose assets under management amount to billions of dollars. In 2021, he forecast bitcoin (BTC) at $500,000. Now she predicts it will hit one million in 2030. Cathie Wood is recognized as a highly influential money manager: her firm invests in stocks that she believes will double in value in five years. Ark Invest’s fund has recorded an average annual return of almost 45% in the past five years. Cathie Wood’s opinion is therefore particularly popular and her two recent purchases of GBTC are a very positive sign for bitcoin (BTC).
Ark Investments and bitcoin with grayscale sauce: GBTC
Ark Investments post their investments on their site and we can clearly see the last two in GBTC, November 15th and 22nd, 2022. In total, Ark now holds almost 6.357 million GBTC shares, equal to 0.4% of the company’s total investments. The current value of its GBTCs is estimated at $55 million. GBTC shares traded at a 45% discount below their net asset value. An arguably bold gamble, as Grayscale currently refuses to disclose its reserves as cryptocurrency exchanges are currently doing. Grayscale is said to be the world’s largest holder of bitcoin (after Satoshi Nakamoto) and would not be in trouble despite setbacks from its subsidiary Genesis, which has $175 million locked up in FTX and a billion to find to bail out his accounts.
Does Grayscale really hold 634,000 bitcoins?
Launched in September 2013, GBTC is a stock that offers select investment funds a way to gain exposure to bitcoin without actually buying it. It is therefore Grayscale that holds the bitcoins (or not?) and not its investors. Following the decline in GBTC shares, many investors are questioning the management of their funds and Greyscale issued a press release Nov. 18 to reassure them.
Grayscale’s parent company is Digital Currency Group and has already repurchased GBTC shares as an SEC filing shows us: Digital Currency Group, Inc. (“DCG”), the parent company of Grayscale Investments, LLC, has authorized DCG to purchase shares of Grayscale Bitcoin Trust (OTCQX: GBTC) for a total value of $1 billion “. (October 2021).
We can therefore legitimately ask ourselves whether the parent company, which also owns Genesis and Coindesk (among others), does not buy back (in vain) its shares to support the course. If Grayscale sells bitcoin to support Genesis, one would expect the price of bitcoin to crash.
Is Cathie Wood making the right choice by buying GBTC in bulk at discount prices? Her fund would be the largest holder of GBTC (after DCG). Repurchase to support the course? Since the incredible fall of FTX, unimaginable not so long ago, we no longer know who to trust… Does Grayscale still have that many bitcoins? Will we have to sell it to save Genesis? We are literally living a real soap opera, exciting, but also impactful for many small investors. The bear market is likely to be long, very long…
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Subprime, financial crises, runaway inflation, tax havens… Bitcoin was designed for greater transparency and maybe it will finally change the game. I try to understand this new environment and try to explain it to myself. The road is undoubtedly long, but it is worth it.