ARK Invest CEO Cathie Wood says that the US banking troubles will prompt institutions to invest in Bitcoin (BTC) in order to diversify their portfolios. In a new interview with Bloomberg, Wood says Bitcoin’s strong performance as US banks failed will encourage wider adoption of the crypto asset. “One of the things that happen in […]
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On Nov. 18, 2022, at 5:47 p.m. (ET), Grayscale Investments’ official Twitter account shared information on the safety and security associated with Grayscale’s digital asset products. The update from Grayscale follows the recent FTX collapse that has shaken crypto investors, and Digital Currency Group’s (DCG) Genesis pausing the firm’s lending unit in terms of withdrawals […]
Rothschild Investment Corp has bought more Bitcoin and Ethereum exposure via Grayscale despite the ongoing crypto market retreat.
Billion-dollar investment firm Rothschild Investment Corp quadrupled its exposure to Bitcoin (BTC) since April, new records show.
In a filing with the United States' Securities and Exchange Commission (SEC) on July 17, Rothschild confirmed that it now owns 141,405 shares of the Grayscale Bitcoin Trust (GBTC).
A quiet but nonetheless substantial player among institutions, Rothchild Investment Corp has also invested in Grayscale's Ether (ETH) equivalent, the Grayscale Ethereum Trust.
Its exposure to Bitcoin has increased considerably this year, the filing shows — in April, its GBTC shares totaled 38,346.
In BTC terms, with each GBTC share equal to 0.000939767 BTC, Rothschild thus has an equivalent Bitcoin exposure of 132.8 BTC ($3.94 million).
The data implies that declining prices have not fazed executives, Bitcoin maintaining a drawdown for three months after hitting its all-time highs of $64,500 in mid May.
As Grayscale CEO Michael Sonnenshein noted this week, institutional players are likely taking little notice of short-term price moves, instead concentrating on a much lower-time-preference strategy when it comes to cryptocurrency.
"Investors in this asset class are really not focused on... short-term movements in price," he told CNBC.
"These are really investors looking at their allocations in the medium to long term, and so any volatility or dampening of volatility is not something anyone is fazed by."
On Monday, ARK Invest purchased a reported 310,000 GBTC shares of its own, bringing its combined holdings to 8.81 million or 0.5% of its portfolio. At its peak, GBTC represented 0.9% of the ARK portfolio in late March.
As Cointelegraph reported, Grayscale is at the center of discussions this week as it unlocked over 16,000 BTC worth of GBTC shares on Sunday.
Related: Institutional demand for Bitcoin evaporates as BTC struggles below $31K
Concerns, while arguably unfounded, long abounded that the event would create downward Bitcoin price pressure, with the sharpening of the drawdown on Monday and Tuesday fuelling the fire.
Regardless, since GBTC investors cannot redeem shares for BTC and then sell for fiat currency, Bitcoin markets are in fact left out of the equation when it comes to unlockings.
Grayscale itself only sells a tiny amount of the Trust's BTC holdings for fund management purposes.
Ark’s Q1 SEC report revealed holdings of 639,069 shares in Grayscale's Ethereum Trust, worth more than $20 million.
Cathie Wood's Ark Investment has reported holdings of 639,069 shares in Grayscale's Ethereum Trust for Q1 — currently worth around $20.9 million at today’s prices.
ARK Investment has bought 639,069 shares of the Grayscale Ethereum Trust. pic.twitter.com/ofXD5F7QpA
— Documenting Ethereum (@DocumentEther) May 18, 2021
The news of Ark’s major investment into Ethereum was seen as a bullish sign by Ethereum and DeFi proponents. Mythos Capital founder and Bankless author Ryan Adams emphasized how significant he saw the developments:
“Remember when you told you the institutions would never buy ETH? They keep underestimating this asset. ETH IS MONEY.”
Ether bulls have been growing noticeably more confident recently, with the co-founder of venture capital firm Framework Ventures, Vance Spencer tweeting earlier today:
“There were many times when crypto would not have been strong enough to survive without BTC as the dominant narrative. I no longer believe this is the case. Regime change is coming.”
Cointelegraph reported on May 5 that institutional managers bought $30.2 million worth of Ethereum at the end of April, bringing their total holdings to an all-time high of $13.9 billion.
Despite the excitement around the ETH buy, Ark’s Q1 filing with SEC earlier this month shows the firm's portfolio still heavily leans in Bitcoin’s favor. Ark reported holdings of 8.6 million shares in Grayscale's Bitcoin Trust, worth more than $298 million as of today.
Data from TradingView however shows that Grayscale’s ETH Trust has been much more lucrative compared to Grayscale’s Bitcoin trust in 2021.
The share price of Grayscale's ETH Trust, or ETHE, has increased by 179% this year, up from $11.70 on Jan. 4, to $32.70 as of today. The share price of Grayscale's BTC Trust, or GBTC, has increased by a mere 1.7% in the same time frame, up from $33.80 on Jan. 4, to around $34.38 today. GBTC has been trading at a 15-20% discount to its Bitcoin holdings.
Cathie Wood and Ark Investments don’t share the same environmental concerns as expressed recently by Elon Musk and Tesla.
In a May 17 newsletter published by the firm, Ark questioned how well Elon Musk had done his research on the topic, noting that “Tesla’s decision seems to have been triggered by private equity firm Greenidge’s plans to revive a coal power plant to mine Bitcoin.”
The firm highlighted that Greenidge had clarified not only that its plant is powered by natural gas and feeds the grid but also that it bought carbon credits to offset the emissions:
“In our view, the concerns around Bitcoin’s energy consumption are misguided. Contrary to consensus thinking, we believe the impact of Bitcoin mining could become a net positive to the environment.”
According to news outlet Bazinga on May 18, Ark also recently added another 259,897 Coinbase shares to its holdings via the Ark Innovation ETF and the ARK Next Generation Internet ETF — worth more than $62 million at today’s price of around $241.
