The asset management firm Ark Invest, led by the renowned money manager Cathie Wood, significantly increased its holdings of its own spot Bitcoin exchange-traded fund throughout the week, making a remarkable $44 million worth of purchases.
Buying and Selling: In a noteworthy move, Ark purchased 316,526 units of ARK 21Shares Bitcoin ETF (ARKB) on Friday. Concurrently, the firm divested 510,337 units of the ProShares Bitcoin Strategy ETF (BITO) valued at $10.25 million. BITO focuses on generating returns corresponding to the performance of Bitcoin by investing in Bitcoin futures contracts, whereas ARKB is among the 11 spot Bitcoin ETFs recently approved by the SEC, directly investing in Bitcoin.
Ark also made several pair trades, acquiring ARKB and selling BITO in three out of the four sessions of the holiday-shortened week. Throughout the week, Ark purchased a total of 1,047,648 ARKB units worth $44.09 million while selling 2,026,916 units of BITO valued at $41.06 million.
Implications of Pair Trades: A pair trade is a market-neutral strategy in which a trader bets two or more securities will diverge or converge in price, effectively hedging against potential losses.
By Friday, ARKB had accumulated $309.66 million worth of Bitcoin, comprising 100% of its holdings. It is worth noting that Wood is a fervent Bitcoin supporter, projecting a price target of $1.5 million for the cryptocurrency by 2030.
Shift in Tech Holdings: Additionally, Ark reduced its exposure to Advanced Micro Devices, Inc. (AMD). The firm, through its Ark Next Generation Internet ETF (ARKW), sold 45,052 AMD shares on Friday, raking in approximately $7.85 million in proceeds. AMD’s stock surged by 7.11% to close at $174.23 on Friday, reflecting a nearly 19% increase for the week on the back of favorable analyst recommendations regarding its potential to benefit from the second wave of AI. Three analysts raised their price targets for AMD while maintaining bullish recommendations.
