Cathie Wood Buys $1.4M Of GBTC — Even As World's Largest Bitcoin Fund Faces Pressure From Genesis Fallout

Cathie Wood-led ARK Investment Management bought over 176,000 shares of Grayscale Bitcoin Trust GBTC at an estimated valuation of $1.46 million. The purchase was done via the ARK Next Generation Internet ETF ARKW. Last week, ARK purchased GBTC worth $2.8 million.

ARK’s purchase comes at a time the world's largest Bitcoin BTC/USD fund is gaining focus due to the asset manager stating it will not share the proof of reserves with customers. 

“Due to security concerns, we do not make such on-chain wallet information and confirmation data publicly available through a cryptographic Proof-of-Reserve, or other advanced cryptographic accounting procedure,” Grayscale said in a statement on its website.

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The asset manager’s comments come in the backdrop of many exchanges coming forth and sharing their proof-of-reserves to calm investor nerves frayed by FTX’s collapse. Interestingly, GBTC is currently trading at about a 42% discount to Bitcoin.

Stopping Redemptions: Last week, Genesis Global Capital, the lending division of crypto investment bank Genesis Global Trading, temporarily stopped accepting redemptions and initiating new loans. 

However, even if Genesis is unable to raise funds for its lending book and files for bankruptcy, creditors will have no claim on GBTC assets, reported CoinDesk, citing a Bernstein report. Grayscale Investments, which manages GBTC, Genesis and CoinDesk are owned by DCG.

“GBTC’s trust structure protects its holders and remains ring-fenced from failures within DCG or DCG group entities,” analysts Gautam Chhugani and Manas Agrawal wrote according to the report.

However, Genesis stated on Monday it has no plans to file for bankruptcy imminently, according to a Reuters report.

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