According to the latest data on October 18th, the GBTC negative premium rate is 12.98%. However, looking back to February at the beginning of this year, the negative premium of GBTC was still 46.02%. The secondary market price of GBTC has increased by 171.67% from the beginning of the year to now, which is the closest trading price to the asset net value since December 2021.

BlockBeats interviewed a new fund, NextGenDigital Venture, in mid-2021. Their first major move after being established at the beginning of the year was to invest in the Grayscale Bitcoin Trust (GBTC), which was gradually being "forgotten" by the market at the time. They believed that with the end of the US dollar interest rate cycle, it was a good time to allocate to GBTC, which could generate better alpha returns than Bitcoin.

After researching, we found that we can provide a channel to obtain GBTC, which is also the prototype of Next Generation Fund I. We believe that in this cycle stage, purchasing Bitcoin at a 40% discount, combined with our derivative tools and on-chain data monitoring team, is the best crypto configuration for most people.

Related reading: "Interview with NDV: Why did traditional asset management elites choose to heavily invest in GBTC when encountering crypto whales born after 2000?".

Looking back now, the judgment of NextGenDigital Venture was very accurate. As we all know, since the beginning of the year, the price of GBTC has been increasing and the negative premium rate has been greatly reduced. Especially after Grayscale's victory, the SEC is facing multiple pressures, and the day when Bitcoin spot ETF is approved seems to be getting closer and closer to us.

After the grayscale victory, the SEC's attitude gradually softened

Since June of last year, Grayscale has been engaged in a lawsuit with the SEC over the launch of a Bitcoin spot ETF. As the tug-of-war between Grayscale and the SEC continues, discussions about a Bitcoin ETF have become increasingly prevalent.

As one of the traditional financial institutions that entered the cryptocurrency market early on, Grayscale has planned to apply for the conversion of its BTC Trust to an exchange-traded fund (ETF) since October 2020. The asset growth of Grayscale's Bitcoin Trust (GBTC) managed by Grayscale has outperformed most registered ETFs in the United States.

On August 30th, according to finance.yahoo data, Grayscale's victory over the SEC has led to the busiest trading period for its Grayscale Bitcoin Trust (GBTC) in 14 months. Nearly 20 million shares of GBTC have changed hands during the day, reaching the highest level since the crypto market crash in June 2022. At the same time, the stock price of GBTC has also risen by 18% to nearly $21.

Following the decision by the US SEC not to seek an appeal on October 16th, Grayscale released a statement stating that "the 45-day period for seeking a rehearing under the Federal Rules of Appellate Procedure has expired. The court will issue a final mandate within 7 days. The Grayscale team is ready to convert GBTC to an ETF once approved by the SEC."

Last week, Grayscale submitted an update file for GBTC, which basically registers the fund according to the Securities Act of 1933. Bloomberg ETF analyst Seyffart stated that this submission is a necessary step for GBTC to convert to an ETF. This does not indicate a timetable, but it is definitely a positive signal.

In a recent interview, SEC Chairman Gensler's attitude towards BTC spot ETFs has undergone a significant change. Gary Gensler stated that staff are "considering" multiple BTC spot ETFs, and he emphasized that supporters of Bitcoin ETFs must ensure that their products are registered with the US Securities and Exchange Commission and go through a filing process similar to public offerings.

The decision of the US Federal Court also marks a change in the SEC's tough stance on Bitcoin spot ETF. At the end of August, Grayscale won an important victory in its dispute with the SEC over Bitcoin spot ETF. According to court documents, a Washington appeals panel of three judges overturned the SEC's decision to block Grayscale's ETF. The court said that "rejecting Grayscale's proposal was arbitrary and capricious because the SEC failed to explain its different treatment of similar products."

Recently, ARK has continued to reduce its holdings in GBTC over the past two years.

At the same time, it is worth noting that according to the ARK Invest's holdings data, the ARK Invest's holdings of GBTC have been reduced by a total of 134,992 shares from October to present. As of Friday's close, GBTC closed at $22.45, and based on the closing price, the value of the reduction is approximately $3.03 million.

Not only in October, but also in the past two years, ARK has been gradually reducing its holdings of GBTC.

According to the ARK Ark Fund's position data, from February 1, 2022 to March 18, 2023, the ARK Fund reduced its holdings of 296,694 shares of Grayscale GBTC, worth approximately $4.5777 million. As of the end of March, the cumulative reduction was 101,408 shares of Grayscale GBTC, worth approximately $1.659 million.

From April 1st to May 14th, the data shows that ARK Invest has cumulatively reduced its holdings of 89,995 GBTC shares, which is worth approximately $1.2833 million at current prices.

Data displayed, ARK Invest reduced its holdings of 56,245 GBTC shares worth approximately $1.08 million in September. While reducing its GBTC holdings, ARK is also actively entering the Bitcoin spot ETF market.

Many people have raised questions about why the market price of GBTC is on the rise while ARK has been reducing its holdings. Is it because of another mistake made by Cathie Wood? After all, ARK's "sucker" operation is not limited to GBTC. In Cathie Wood's investment history, she has also sold off Nvidia.

Not just GBTC, Muto Sister also sells products that surpass NVIDIA

When ARK was founded in 2014, one of the major holdings in the flagship fund was NVIDIA. Data shows that since the establishment of ARKK, NVIDIA has contributed 13% to the fund's total return of 112%, second only to Tesla (TSLA.US), Grayscale Bitcoin Trust (GBTC.US), and Invitae (NVTA.US).

However, at the beginning of January, Miss Wood liquidated her holdings in NVIDIA (NVDA.US). However, Miss Wood did not anticipate the rapid rise of the artificial intelligence boom, which pushed up the stock prices of NVIDIA and other large technology stocks. Since Wood sold NVIDIA shares, the market value of this chip manufacturer has increased by about $560 billion, of which $200 billion soared overnight after the company announced better-than-expected performance.

According to data, in October last year, when Nvidia began to rebound from its lowest level since August 2020, ARKK flagship fund held over 750,000 shares of Nvidia stock. Wood reduced the position to slightly less than 39,000 shares at the end of November last year and then to zero in mid-January. Although ARK focuses on disruptive innovation, its flagship fund held almost no AI-related stocks that have surged this year.

Related reading: "The biggest "scapegoat" Sister Wood! Flagship fund "gets off early" and clears out Nvidia (NVDA.US) in January, missing out on a $560 billion rebound".

ARK is preparing its own ETF?

According to Tradingview data, since August, the ARK Ark Fund has been in a continuous decline, but Mu Tou Jie seems to have other ideas and is preparing to launch her own Bitcoin ETF.

On August 25th of this year, James Seyffart, a senior ETF analyst at Bloomberg, wrote that ARK Invest and 21Shares jointly submitted two Ethereum futures ETF applications, one of which is an Ethereum futures ETF with the code ARKZ, and the other is a Bitcoin + Ethereum futures ETF with the code ARKY. Here is the source.

On September 20th, Cathie Wood's ARK Invest announced that it has acquired European ETF issuer Rize ETF. The specific acquisition amount was not disclosed. This acquisition will allow ARK to enter the European ETF market, and the Rize ETF team will join ARK.

On October 12th, Eric Balchunas, a senior ETF analyst at Bloomberg, stated on social media that ARK had just submitted an updated prospectus for its Bitcoin spot ETF. A few weeks ago, the SEC had sent comments and questions regarding the S-1 form to the issuer via email. It is likely that ARK has responded to these questions in this submission. He stated that although approval may not come immediately, this "back-and-forth communication" with the SEC is a very positive signal.

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