After reducing her holdings in Coinbase, Square and other stocks, Cathie Wood is eyeing Canadian Bitcoin ETFs

ARK Invest, the asset management firm helmed by Cathie Wood, is currently considering investing in a Canadian Bitcoin ETF, while no such product has yet been launched in the United States.

According to a public SEC regulatory document, ARK Invest modified the prospectus of its fund ARK Next Generation Internet ETF (ARKW), which states: "This fund may invest in shares of other funds, including ETFs registered and listed in Canada (Canadian Bitcoin ETF)."

A Bitcoin ETF is an investment vehicle that allows investors to buy shares representing the world's most popular cryptocurrency without having to hold and store the underlying asset. Although U.S. investors have long been eager for a Bitcoin ETF, the U.S. Securities and Exchange Commission (SEC) has so far denied any attempts to launch such a vehicle, citing concerns about price manipulation in the crypto market.

Bitpush previously reported that Canada is one of the few countries that currently offers Bitcoin ETFs. On February 18, the Purpose Bitcoin ETF was launched as the first North American Bitcoin ETF, followed by the Evolve and CI Galaxy Bitcoin ETFs. All three funds are traded on the Toronto Stock Exchange.

The Grayscale Bitcoin Trust (GBTC) is the flagship investment product offered by Grayscale Investments, and it has some similarities to a Bitcoin ETF in that it enables investors to trade shares in a trust that holds a large amount of Bitcoin.

However, shortly after the Canadian Bitcoin ETF launched, GBTC’s historical premium turned negative, indicating a decline in demand for the product.

According to Bloomberg ETF analyst Eric Balchunas, ARK Invest currently holds more than 8.5 million shares of GBTC, worth approximately $313 million, so ARKW may sell some of its GBTC shares in favor of the Canadian Bitcoin ETF.

Balchunas noted that GBTC is down 22% year to date, compared to the Destination Bitcoin ETF’s 6% decline over the same period.

He also suggested that even if the SEC approves an ETF tied to Bitcoin futures, Cathie Wood could stick with a Canadian Bitcoin ETF, saying, “You can’t beat a physically-backed Bitcoin ETF (besides holding Bitcoin directly, of course).”

ARK's recent series of share reduction actions have attracted investors' attention.

According to arktrack.com data, Cathie Wood's ARK ETF is reducing its holdings of Coinbase, Square and other Bitcoin and cryptocurrency-related companies. Musk's Tesla, which is closely related to Bitcoin, is also on this list. Cathie Wood's multiple funds have reduced their holdings of 92,570 shares of Coinbase, 56,230 shares of GBTC, 28,368 shares of Tesla, and Jack Dorsey's Square and Twitter, by 138,398 shares and 49,608 shares respectively.

Not only these stocks, Cathie Wood's attitude towards technology stocks is also relatively cold at present. She believes that the competition between China and the United States will seriously affect the development trend of technology stocks in both countries, especially Chinese technology stocks.

She has said that valuations of Chinese technology stocks are likely to continue to shrink due to Beijing's regulatory crackdown, and that these stock prices have already begun to fall and are likely to continue to fall in the future.

Ark Fund continued to reduce its holdings in Chinese technology stocks, including Tencent and JD.com (NASDAQ: JD). In addition, other Chinese technology stocks that were reduced included KE Holdings (NYSE: BEKE), an online platform operator for Chinese housing transactions and services.

The ETF managed by Ark Investment Management, owned by Cathie Wood, sold approximately 1.39 million Beike ADRs, 970,390 JD.com ADRs, 629,884 Tencent ADRs, 107,767 Alibaba ADRs, 116,153 Pinduoduo ADRs, and 13,761 BYD ADRs.

The weighting of Ark's flagship fund, Tencent, has fallen to about 0.5%, the lowest since September 2020, while the weighting of the Ark Next Generation Internet ETF has also fallen to about 0.8%, the lowest since at least 2014.

In the latest report, JPMorgan analysts stated that although institutional investors have continued to sell Chinese stocks recently, individual investors see the pullback of Chinese stocks as a good opportunity to increase their holdings.

Cathie Wood has been optimistic about Bitcoin for a long time. In June this year, ARK Invest joined the ranks of more than a dozen US Bitcoin ETF candidate companies.

However, despite the apparent appetite for a Bitcoin ETF among U.S. investors, SEC Chairman Gary Gensler hinted last month that the agency was not inclined to approve one.

In the U.S. ETF market, investors and issuers are still waiting for regulators to approve ETF products that invest in cryptocurrencies. Although Canada and Europe have approved some products, the U.S. Securities and Exchange Commission still has a large backlog of Bitcoin ETF applications. ARK is one of them. It has partnered with Switzerland's 21Shares AG to submit a plan to establish a Bitcoin ETF in the United States.

If the Bitcoin ETF is approved, it will bring a lot of business growth to the company. The market demand for Bitcoin investment continues to grow. In addition to meeting this part of the market demand, launching a Bitcoin ETF can also expand the company's business and bring in additional income. These reasons have prompted many companies to apply to the SEC for listing and launching a Bitcoin ETF.

The US financial market accounts for half of the world's total. If Bitcoin ETFs are listed and traded in the US market, it may push up the price of Bitcoin.