How to interpret ARK Fund’s crypto investment moves as it builds $700 million position in Bitcoin, COIN stock against the trend

According to media reports, Ark Investment Management (ARK INVEST) has recently purchased $20 million in bitcoin

According to media reports, Ark Investment Management (ARK INVEST) has recently purchased $20 million in bitcoin, and in addition, the company’s fund continued to buy Coinbase stock (COIN) last week, accumulating a total of $706 million to date, and all of this happened after the bitcoin price plunged and Coinbase stock continued to move lower.

How do you interpret ARK’s series of frequent investment moves, as the market is in a state of panic as the cryptocurrency market plunges and ARK buys bitcoin directly for the first time and continues to increase its position in Coinbase stock? Will “Sister Wood” be able to create another investment myth this time like she did with her “bet” on Tesla?

ARK increases its position against the trend as Coinbase’s stock price plunges
In the recent week, ARK’s ARK Innovation ETF has continued to buy a large amount of Coinbase shares, with an average daily position of 160,000 to 220,000 shares. So far, Ark’s ETF has accumulated 3.968 million shares of Coinbase Global Inc, with a position worth about $891 million. Coinbase landed on NASDAQ on April 14, an event that has been cited as a milestone in the crypto space, but Coinbase stock has not performed as well in the secondary market and has continued to fall, closing at $225.3 as of May 25.

ARK, however, has continued to increase its holdings during this period, with the company’s ARKK (ARK Innovation ETF) and ARKW (ARK Next Generation Internet ETF) holding 3.148 million shares at $224.35 per share and 225.3 per share, respectively, as of May 25. 819,000 shares of Coinbase, representing 3.54% and 3.37% of the fund’s portfolio, respectively.

How to interpret ARK Fund's crypto investment moves as it builds 0 million position in Bitcoin, COIN stock against the trend
How to interpret ARK Fund's crypto investment moves as it builds 0 million position in Bitcoin, COIN stock against the trend

First Bitcoin Purchase After Big Drop, Massive Buy of GBTC
In addition to Coinbase stock, it is easy to see that ARK is also a large holder of Tesla stock, currently holding 4.904 million shares of TSLA, which is not surprising since ARK has always been the “milk king” of Tesla. Catherine Wood (“Sister Wood”) said on CNBC that she believes Tesla shares are expected to exceed $6,000 within the next five years. But it’s worth noting for crypto investors that ARK bought $20 million of bitcoin outright for the first time after the recent bitcoin plunge. Ark Investment Management purchased $19,872,939 in bitcoin, according to its SEC reporting filing. The Ark Crypto Fund requires a minimum investment of $1 million and has raised nearly $20 million from 12 investors.

For this investment, Cathie Wood, CEO of Ark Investment Management, believes that bitcoin could go up after dropping as much as 50 percent.

In addition, ARK is still buying heavily into Grayscale Bitcoin Trust (GBTC), and just on May 24-25 ARK bought another 670,000 shares, and ARK now holds a total of 7.61 million shares of GBTC (worth about $246 million as of May 25), or 4.39% of the fund’s total portfolio. The ARK fund, which has always favored new technologies and is known for its “disruptive innovation” investment choices, has made a series of investments in Bitcoin, GBTC, and Coinbase stock, which shows that it is still optimistic about the prospects and future growth of the crypto market. But many people will wonder why ARKK is still aggressively investing in the crypto market, especially in the risky and volatile market, where the recent trend of ARKK continues to be sluggish.

“In fact, this is related to ARK’s consistent approach and “Sister Wood”‘s logic of market analysis. ARK Invest was founded in January 2014 by Catherine Wood (known as “Sister Wood”), who has served as the CEO and fund manager of the fund since then.

How to interpret ARK Fund's crypto investment moves as it builds 0 million position in Bitcoin, COIN stock against the trend

ARK Invest has opened 8 ETFs, 6 of which are active ETFs and the other 2 are passive. ARK Invest’s investments are mainly in the innovative fields of artificial intelligence, autonomous driving, fintech, gene sequencing, robotics, and 3D printing. Prior to founding ARK, Wood had more than 40 years of experience in the financial investment field, and she believes that traditional large funds are backward in their thinking about technology stocks, making it difficult for them to keep up with the ever-changing times, which is the main reason she founded ARK.
Wood and ARK became better known in 2020, when her five managed funds (except ARKX) averaged 170% return, standing out among US ETF products. The largest flagship product, ARKK, has averaged almost 40% annualized returns over the past five years, twice the average of Warren Buffett, and Catherine Wood has been named “Bull Market Queen,” “Tech Goddess,” and “Female Warren Buffett. Catherine Wood has also earned the titles of “Bull Market Queen,” “Tech Goddess,” and “Female Warren Buffett.

How to interpret ARK Fund's crypto investment moves as it builds 0 million position in Bitcoin, COIN stock against the trend

ARKK vs Nasdaq 100 vs S&P 500 Cumulative gains since the end of 2014 ARKK’s success is largely due to its investments in new technology stocks such as Tesla. In 2016-2018, during almost the entire period when the market was questioning Tesla, “Sister Wood” continued to increase her holdings in Tesla stock.

As long as you are optimistic, you will firmly hold, even if the counter trend to increase positions, this is probably the ARK “wood sister” investment logic.

Despite the recent market crash and downturn, “Woody” still thinks bitcoin will reach a price of $500,000. ARK expects that if institutional investors allocate 2.55% of bitcoin, the price is expected to increase by $200,000; if the allocation ratio reaches 6.55%, the price will increase by $500,000.

How to interpret ARK Fund's crypto investment moves as it builds 0 million position in Bitcoin, COIN stock against the trend

In the ARK 2021 Big Ideas released on January 27th, “Sister Wood” devoted 2 chapters to the fundamentals of Bitcoin and the in-depth analysis of institutional allocation of Bitcoin, expecting Bitcoin to become part of the balance sheets of many institutions and public companies in the future, and that Bitcoin will be greeted by The Sea of Stars. As for why Cathie Wood is so bullish on bitcoin, she said in a previous interview with Yahoo Finance: On the one hand, bitcoin is not as speculative as it used to be, and the investment community is becoming more sophisticated. Before Tesla, there have been companies like MicroStratey and Square that have announced bitcoin holdings. On the other hand, over the last decade, bitcoin has been the only investment option that has a low correlation to other traditional assets. This means that it is a good diversification option for institutional investors.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/how-to-interpret-ark-funds-crypto-investment-moves-as-it-builds-700-million-position-in-bitcoin-coin-stock-against-the-trend/
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