ARK Investment Management CEO and founder Cathie Wood ("Woodsie") reaffirmed on Tuesday that Grayscale Investments continues to be the most valuable asset under Barry Silbert's Digital Currency Group (DCG).
Grayscale: DCG's Profit Powerhouse
Wood stated, "Grayscale's trust funds are their crown jewels—a proven revenue generator. We believe DCG will prioritize protecting this segment." Her comments followed Genesis (a DCG subsidiary) halting withdrawals amid liquidity concerns, raising questions about DCG's overall stability. However, Wood emphasized Grayscale's resilience as DCG's strongest division.
ARK's Strategic GBTC Investments
Wood has been actively accumulating shares of the Grayscale Bitcoin Trust (GBTC) through ARK Next Generation Internet ETF (ARKW):
- Recent Purchases: ARKW added ~315,300 GBTC shares last week, marking its third buy-in this month—the first since July 2021.
- Discount Opportunity: Despite GBTC trading at a record discount to Bitcoin’s spot price, Wood anticipates convergence, citing "significant upside potential."
👉 Why institutional investors are turning to Grayscale
Security and Transparency
Wood expressed confidence in GBTC’s custody: "All underlying Bitcoin is held in Coinbase’s cold storage, verified by Coinbase itself. This gives us full comfort."
Bitcoin’s Long-Term Outlook
Despite FTX’s collapse intensifying crypto market fears, Wood remains bullish:
- Price Projection: She reiterated her $1 million/Bitcoin target by 2030, driven by the asset’s foundational technology.
- Market Resilience: "Bitcoin will emerge stronger post-crisis," she noted, underscoring its decentralized nature as a safeguard against centralized exchange failures.
Fallout from FTX’s Collapse
The FTX debacle impacted both crypto and traditional finance:
- VC Losses: Paradigm, BlackRock, and Tiger Global faced heavy losses; Sequoia Capital wrote off its $200M+ investment and publicly apologized.
FAQ
Q: Why is Grayscale critical to DCG?
A: Grayscale’s trusts generate steady fees, serving as DCG’s primary revenue stream.
Q: What’s driving ARK’s GBTC purchases?
A: Wood sees the current discount as a short-term anomaly with long-term growth potential.
Q: How does FTX’s fall affect Bitcoin’s future?
A: Decentralized assets like Bitcoin may benefit as trust shifts away from centralized entities.