Ark Investment Management has purchased 315,259 shares of the heavily discounted Grayscale Bitcoin Trust (GBTC) worth $2.8 million.

Ark Investment Management, the investment management fund founded and led by CEO Cathie Wood, has purchased 315,259 shares in the Grayscale Bitcoin Trust (GBTC). The investment, worth $2.8 million, is the first purchase of GBTC by Ark since July 2021.

Grayscale Bitcoin Trust (GBTC) Continues To Trade at A Heavy 38% Discount

Ark Investment purchasing Grayscale Bitcoin Trust shares comes when GBTC trades at a massive discount compared to its NAV (net asset value).

At the time of writing, one share of GBTC is trading at $9.65. According to the Grayscale website, each share represents 0.00091522 BTC. Further doing the math using Bitcoin’s current value of $17k, each share should be worth roughly $15.55.

However, at the current value of $9.65, each GBTC share is trading at a 38% discount. This means that Ark Investment Management has purchased the underlying Bitcoin at a similar discount, which translates to buying BTC at around $10,540.

GBTC Hints of a Recovery on the One-day Chart

Concerning price action, the one-day GBTC chart below shows that the Grayscale Bitcoin Trust shares could be headed towards a relief rally. The chart shows that the daily MFI (green), RSI (red) and MACD hint at an oversold scenario that could result in GBTC attempting a retest of the $10.68 resistance level.

However, GBTC/USD continues to trade in bearish territory below the 50-day (red), 100-day (yellow), 200-day (green) and 200-week (black) moving averages. Therefore, caution is advised when going long on GBTC.

GBTC’s Fortunes are Tied to Those of Bitcoin

As earlier indicated, GBTC tracks the price movement of Bitcoin through its shares. Although its value is currently discounted relative to the underlying allocation of Bitcoin, its fate in the traditional markets is tied to BTC’s price action.

Therefore, if Bitcoin manages to shake off the last week of massive selling due to the FTX saga, GBTC could flourish. The converse is also true. If Bitcoin drops back towards the $15,500 support or even lower, GBTC/USD could retest its local low of $8.43 and even dip some more.

(By John P. Njui)