By
Bena Ilyas
April 23rd, 2024
Amid the crypto bear market, Ark Invest has acquired an additional stake in GBTC, spending over $1.5 million on more than 170,000 shares.
Ark Invest recently purchased 176,945 shares ($1.5 million) in Grayscale’s Bitcoin Trust (GBTC) amid the ongoing decline of the crypto market. The Cathie Wood-helmed investment management firm acquired the shares at a record 45% discount to net asset value in the aftermath of the FTX crash.
Ark Invest Further Shores Up on GBTC Shares
Ark’s GBTC purchase represents the investment firm’s continual consolidation in the crypto bear market. Last week, the Florida-based company also acquired 315,259 GBTC shares worth around $2.8 million. As it stands, Ark Invest now holds 6.4 million GBTC shares worth $53 million.
Last month, CEO Woods said that she sees the Grayscale Trust trading at a “fire sale” price. Her assumption is influenced by the possibility that the Trust will be cleared to convert into a spot exchange-traded fund (ETF) at some point.
In early November, Ark bought 237,675 additional shares in leading crypto exchange Coinbase as the stock retreated following FTX’s collapse. The purchase added to the 420,949 COIN shares that the investment management firm bought earlier.
FTX Collapse Intensifies Crypto Contagion Fears
The collapse of the crypto exchange FTX earlier in the month sent shockwaves throughout the digital asset marketplace. The Bahamian-based crypto firm filed for bankruptcy after allegedly mismanaging customer funds and is now under investigation by the US and Bahamian governments.
FTX’s collapse affected several other companies within the crypto space that have significant exposure to it. These firms include Wintermute, MultiCoin, BlockFi, and Genesis Global Trading. Furthermore, in the wake of FTX’s implosion, a growing number of other crypto firms are also in danger of sinking following mass customer withdrawals.
The resulting liquidity crunch sees several crypto companies seek additional funding to remain operational and stave off insolvency. A prime example is Genesis, a major over-the-counter (OTC) Bitcoin trading platform. The company recently warned of impending bankruptcy if it failed to obtain the $1 billion needed to stay active.
Within the last week, Genesis placed restrictions on its lending services in order to generate new cash for the unit. At the time, Genesis stated:
“In consultation with our professional financial advisors and counsel, we have taken the difficult decision to temporarily suspend redemptions and new loan originations in the lending business.”
In addition, despite the bankruptcy talks, a company representative affirmed Genesis’ intentions to operate for as long as possible. According to the OTC platform’s spokesperson:
“We have no plans to file bankruptcy imminently; our goal is to resolve the current situation consensually without the need for any bankruptcy filing. Genesis continues to have constructive conversations with creditors.”
Traditional Stocks Let Up
In other news, traditional stocks closed lower ahead of the Thanksgiving break, with the S&P 500 slipping 0.39% to 3,949.94. In addition, the Dow Jones Industrial Average (DJIA) dipped by 45.41 points or 0.13%, while the Nasdaq Composite declined 1.09% to conclude the day at 11,024.51.