Grayscale Bitcoin Trust (GBTC) emerged as one of the top performers at Cathie Wood’s ARK Invest during the second quarter of 2023. According to ARK’s quarterly ETF report released on July 19th, GBTC played a significant role in the success of ARK Next Generation Internet exchange-traded fund (ARKW) in Q2.
The report revealed that GBTC was among the top five contributors to ARKW’s growth of over 9% in the second quarter. Alongside other high-ranking performers such as Tesla, Shopify, Unity Software, and Draftkings, Grayscale captured the fifth spot with 108 basis points. It is worth noting that Tesla claimed the top position with 232 basis points, while GBTC held a substantial 108 basis points.
Among the various exchange-traded funds supervised by ARK, ARKW has demonstrated remarkable year-to-date gains, rising by approximately 50% by the end of June. ARKW primarily focuses on capturing investments in internet-based products and services, cloud computing, artificial intelligence, and e-commerce. During Q2, nearly 20% of ARKW’s assets were related to cloud computing, while about 19% were linked to blockchain.
Although GBTC was a top performer for ARKW in Q2 2023, it falls slightly behind Coinbase in terms of asset allocation within ARKW. Grayscale accounted for approximately 7.5% of ARKW’s holdings, just below the holding percentage of Tesla. Meanwhile, Coinbase secured the largest allocation, accounting for almost 9% of the total assets.
ARKW also allocated a significant portion of its assets, ranked fourth, to Block, a cryptocurrency platform created by Jack Dorsey. Block represented around 7% of the total assets in Q2. However, unlike GBTC, Block was among the top five worst performers for ARKW, causing a 30 basis point drag in Q2.
The latest quarterly report by ARK does not include ARK’s recent substantial sales of Coinbase stock. As the value of Coinbase shares surged above $90 in mid-July, ARK actively took the opportunity to generate profits. Over the course of July, ARK sold approximately one million Coinbase shares, amounting to around $97 million.
Despite the sale of Coinbase stock, ARK’s CEO, Cathie Wood, remains optimistic about Coinbase due to Ripple’s legal progress against the United States Securities and Exchange Commission. Wood reiterated her bullish stance on Bitcoin (BTC) on July 17th, predicting that it would eventually reach $1.5 million per coin.
In conclusion, Grayscale Bitcoin Trust played a prominent role in the success of ARK Next Generation Internet exchange-traded fund in Q2 2023. While ARKW witnessed significant gains, GBTC ranked as one of the top contributors alongside other high-performing assets. Moreover, ARKW’s strategic asset allocation includes a substantial holding in Coinbase and Block, reflecting ARK’s confidence in these cryptocurrency-related platforms. Despite recent sales of Coinbase stock, Cathie Wood maintains an optimistic outlook for the platform, underpinned by Ripple’s legal progress and her bullish stance on Bitcoin’s future value.
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