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ARK Invest CEO says Bitcoin Is a "Much Bigger Idea than Apple or Amazon" as Crypto Gains More Recognition

Cathie Wood, the CEO of Ark Invest who made a bullish prediction on Tesla when Wall Street was skeptic, has made yet another one – and it’s on Bitcoin.

Wood considers Bitcoin to be a game-changer and uncovers why the cryptocurrency is soaring and gaining traction as a hedge. In an interview with Yahoo Finance, she disclosed that her asset management firm had foreseen that Bitcoin and other cryptocurrencies would eventually gain institutional support. What they were not expecting, however, was the portion each firm allocated to BTC. Wood explained why Bitcoin was so attractive to financial institutions. She said:

“We have been expecting institutions to start moving into Bitcoin and other crypto assets, but primarily Bitcoin, the most secure of the blockchains, because if you look at the correlation of Bitcoin’s performance relative to any other asset class, it has the lowest correlation – meaning if you buy some Bitcoin, you will further diversify your portfolio and increase your returns with lower risk.”

She further revealed:

“Institutions look for that low correlation. Bitcoin has it. That’s clear. We have 10 years of history now.”

Why Bitcoin will steal the tech spotlight

The Ark Invest CEO hinted that in the future, Bitcoin’s potential may be even bigger than that of Amazon or Apple. Currently, Bitcoin’s market cap does not even equate to half of Apple or Amazon’s monetary value, but its unique features have been recognized by many. Wood said:

“Bitcoin is roughly a $600 billion dollar market cap, so not even half the size of Apple or Amazon, put it in perspective and yet it has a really big idea. I think a much bigger idea than Apple or Amazon.”

She added that it was really the first of its kind, as Bitcoin was global and truly decentralized as a digital currency. The CEO added that countries have increasingly recognized Bitcoin’s budding potential, and said:

“When China basically shut down the exchanges in China that dealt with crypto, especially Bitcoin, that activity just moved over to Japan, Thailand and Korea – other countries that wanted to move ahead in this innovation space. They did not want to miss this next big thing.”

Bitcoin has increasingly gained traction, especially since the last quarter of 2020, where its bull run gained momentum and propelled the cryptocurrency to new all-time highs.

Crypto innovation on the rise

From the beginning of 2020 to now, when Bitcoin’s value was around $7,200, the cryptocurrency has soared to new heights, increasing five-fold in value to trade around $38,000 as institutional corporations led by MicroStrategy, Square, and MassMutual have come to recognize Bitcoin’s budding potential. Due to the pandemic, the cryptocurrency industry has attracted more attention, as many have come to recognize crypto as a hedge against monetary policies and inflation rates.

Many industry experts have acknowledged that the underlying narrative surrounding Bitcoin has quickly shifted in 2020. While holding Bitcoin was previously considered a risky move to take as a portfolio manager, the narrative quickly shifted to it being a career risk to not own Bitcoin.

Bitcoin is not the only cryptocurrency that has been gaining more and more traction. Historically, altcoins also surge higher when Bitcoin undergoes bullish momentum.

Currently, the second-largest cryptocurrency by market cap behind Bitcoin, Ethereum, has hit a new all-time high above $1,600. Currently, the cryptocurrency is in price discovery mode, up nearly 7% from yesterday’s price.

Despite Ethereum’s high, Grayscale has taken the opportunity to add more Ether coins to its Grayscale Ethereum Trust, and the move can be perceived as a huge vote of confidence for Ethereum.

Cathie Wood’s ARK Invest Purchased Coinbase Stock on Its First Day of Trading

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Ark Investment Management LLC purchased $246 million worth of Coinbase shares on the crypto exchange’s Nasdaq debut on Wednesday, April 14 and sold some of its Tesla (TSLA) stock.

ARK Invest asset management company bought 749,205 Coinbase shares (ticker: COIN) for three of its actively managed exchange-traded funds: ARK Fintech Innovation EFT (ARKF), ARK Next Generation Internet EFT (ARKW), and The ARK Innovation ETF (ARKK).

The firm bought $168 million worth of Coinbase shares for its ARK Innovation fund, while the remaining investments went into its fintech innovation and next-generation funds.

On Wednesday, Coinbase shares listed at $381 and hit a high of almost $430 before closing down at around $328 during that day. On Thursday’s close, Coinbase shares were trading slightly down in pre-market hours at about $319 per share.

Based on Thursday’s close, Coinbase’s valuation stands at around $84 billion, for its fully diluted capitalization of 261.3 million shares.

The move to purchase Coinbase shares gives ARK more indirect exposure to cryptocurrencies on top of its big bet on the likes of Tesla, which recently invested in Bitcoin and stated that it would accept it as a payment for its cars.

Although ARK sold Tesla shares worth about $178 million, the stock is still by far the biggest position by value on its major funds.

Crypto as New Alternative Investment

Cathie Wood, the founder and CEO of ARK Investment Management LLC, is a big champion of Bitcoin and recently said that the growth of crypto assets will “gut” traditional banks. Wood views cryptocurrencies as a substitute for cash and as part of the solution to the dying the 60/40 stock/bond allocation in balanced portfolios.

Wood recently said that Bitcoin and other crypto assets could eventually become part of the recommended portfolio for every investor, which is 60% in stocks and 40% in fixed income.

According to Wood, Bitcoin has multiple uses. Besides serving as a substitute for bonds and cash, Bitcoin is also a substitute for gold, which has failed to rise just like the dollar has declined. She believes that institutions can use Bitcoin instead of cash as a hedge against unhinged monetary policy.

Earlier this year, Tesla converted part of its balance sheet cash into Bitcoin. Other firms have also increasingly embraced cryptocurrency, either by buying the assets or supporting crypto payments.

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Cathie Wood Joins Amun Crypto Technology Firm's Board

Cathie Wood, a top wall street investor and founder and CEO of ARK Investment management firm, has joined the board of European crypto technology firm Amun Holdings after personally investing in the company owned by 12Shares AG, the issuer of crypto exchange-traded products based in Switzerland.

21Shares AG is the provider of exchange-traded products (ETP) tied to the cryptocurrency market in Switzerland, thus making investing in cryptocurrencies as easy as buying shares using conventional brokers or banks.

Wood talked about her joining the board of Amun Holdings: “I am thrilled to support its efforts. 21Shares is forging a new path for crypto ETPs by leading with research and a keen understanding of this developing asset class.”

21Shares and Amun products are listed on national exchanges in Switzerland, Germany, and Austria, among other locations.

Amun, which is based in Zurich (the capital city in Switzerland), aims to tap Wood’s expertise to expand 21Shares globally. The crypto firm, which earns between $40 million to $50 million per year, aims to enhance retail and institutional accessibility of cryptocurrencies, Amun’s CEO Hany Rashwan said.

Rashwan further revealed that Amun plans to list its first non-Europeans product within the coming months.

The company’s 21Shares Short Bitcoin ETP allows investors to bet against Bitcoin and its 21Shares crypto basket index tracks prices of the leading five crypto assets by market value.

Crypto As a Big Business Opportunity

The move made by Cathie Wood demonstrates how more institutional investors are working to capture the growth of the crypto market. Wood’s funds are vastly involved in the crypto space.

Wood recently made headlines when she invested a total of $246 million of Coinbase shares on April 15, the day when Coinbase Global went public and then bought another one million Coinbase shares worth $580 million the following day. Two months earlier, ARK Invest purchased 7 million shares of Grayscale Bitcoin Trust.

Several firms are increasingly adopting cryptocurrency, either by supporting payments and transfer or actually purchasing the assets.

Forward-thinking firms like Square and Tesla see value in blending crypto assets into their business models. Tesla converted part of its balance sheet cash into Bitcoin earlier this year. Goldman Sachs has introduced a new crypto trading desk and UBS Group, the largest investment bank in Switzerland is in talks to provide crypto investments to its wealthy clients.

Cathie Wood's Ark Investment Has Partnered with 21Shares for a Joint Bitcoin ETF

Cathie Wood, a top wall street investor and founder and CEO of ARK Investment management firm, has cooperated with 21Shares, an issuer of European exchange-traded products, to apply for the Bitcoin ETF-Ark21Shares ETF.

According to a document from the United States Securities and Exchange Commission (SEC) on Monday, June 28, the ETF will be listed on the BZX exchange of the Chicago Board of Options Exchange (CBOE) and trade under the ticker ARKB.

Ark investment fund became the latest company to join the Bitcoin exchange-traded fund (ETF) competition recently.

In addition to holding Bitcoin directly, the ETF will also track the S&P BTC index. The S&P BTC index is developed by an S&P Dow Jones Indices tool that integrates data from crypto exchanges such as Binance, Bitfinex, Bittrex, Bitstamp, Coinbase Pro, and Gemini, a “combination of qualitative and quantitative indicators” to unify bitcoin-linked indicators.

It is reported that the Bank of New York Mellon will act as the manager and transfer agent of the newly proposed ETF, while Coinbase will keep the directly purchased Bitcoins.

The founder and CEO of ARK Investment management firm Cathie Wood have always been a support of cryptocurrency. In addition to being a board member among directors of 21Shares, the fourth-largest issuer of crypto exchange-traded products based in Switzerland. The company has more than $1 billion in assets under management.

As early as May of this year, Cathie Wood has joined the board of European crypto technology firm Amun Holdings.

ETF analyst, Eric Balchunas, told BNN Bloomberg that:

“if approved, the Bitcoin ETF would be of significant benefit to 21Shares, allowing the firm to penetrate the U.S. market.”

Till now, none of any Bitcoin ETF applications has been approved for listing in the US, as the US SEC required more time to review these applications. On June 16, SEC once again postponed approving the application of VanEck Bitcoin Trust’s proposed Bitcoin ETF by 45 days.

Cathie Wood-led ARK Invest Purchases Another $54M Shares in Square

Cathie Wood-led Ark Investment Management has purchased 225,937 shares, estimated to be about $53.7 million in Square last Friday, the American financial services and digital payments company, according to online media Business Insider.

The accumulation just came after Jack Dorsey, CEO of Square, announced that the company was actively creating a new non-custodial, permissionless, and decentralised financial services business platform, mainly focusing on Bitcoin.

The Ark investment, which holds shares of Square, has placed a strong bet on the US version of the online payment provider square. According to the daily holding documents released officially, Ark investment bought a total of about 226,000 shares of the Square (SQ) at the cost of about $54 million.

The six active funds managed by Catherine wood includes Innovation ETF ARKK; Autonomous Technology & Robotics ETF ARKQ; Next Generation Internet ETF ARKW; Genomic Revolution ETF ARKG; Fintech Innovation ETF ARKF; Space Exploration & Innovation ETF ARKX.

Among the ARKK fund that focuses on technology investment, ark investment bought 179,664 square shares last week. At present, the weight of square accounts for the fourth largest proportion of the whole fund, accounting for about 4.97%, followed by only Tesla (10.49%), Roku (5.87%), and Teladoc health inc (5.7%).

In this fund, the ARK team holds a total of 4,529,624 with a market cap of $1,075,876,292.48.

In the ARKW fund focusing on Internet technology, it purchased 46273 square shares, holding a total of 1,107,484 shares of SQ with a market capitalisation of 263,049,599.68, accounting for 4.71%,

In addition to supporting square, it also continued to purchase approximately 64,000 shares of Coinbase. Cathie Wood said in an interview recently that environmental factors will not affect the long-term upward trend of Bitcoin. At present, it has bought Coinbase for five consecutive days.

Not only that, Cathie Wood has always been a staunch cryptocurrency supporter.

As reported by Blockchain.News on June 29, Cathie Wood, a top wall street investor and founder and CEO of ARK Investment management firm, has cooperated with 21Shares, an issuer of European exchange-traded products, to apply for the Bitcoin ETF-Ark21Shares ETF.

Cathie Wood’s Ark Investment Gets into Canadian Bitcoin ETFs As US SEC Delays Applications

Cathie Wood’s Ark Investment Management LLC updated its prospects. They can now invest in Canadian Bitcoin ETFs as the investment management company seeks new ways to bet on digital assets.

A new supplement filing with the US Securities and Exchange Commission (SEC) indicates that Cathie Wood’s ARK investment management company has given itself the green light to buy Canadian Bitcoin Exchange-Traded Fund (ETFs). The firm’s investment product (ARK Next Generation Internet ETF) has updated its prospectus to enable the fund to invest in Bitcoin ETFs based in Canada.

In the past, the firm’s fund (ARK Next Generation Internet ETF) could only get exposure to Bitcoin investment through a grantor trust such as the Grayscale Bitcoin Trust.

The move by Ark Investment Management firm comes amid several delays and rejections for similar products in the US by the market regulator (the US SEC), which likely prompted the firm to seek alternatives abroad.

Since Ark Investment Management filed the supplement with the SEC on Friday, September 10; As a result, its fund (the US$5.7 billion ARK Next Generation Internet ETF) now has another option to get indirect exposure to Bitcoin investment.

Besides the Grayscale Bitcoin Trust (GBTC), the fund now can invest in other pooled investment vehicles such as ETFs based in Canada.

The ARK Next Generation Internet ETF already has investment to Bitcoin exposure worth around 5.5% of the fund invested in the GBTC.

Although the Grayscale Bitcoin Trust is considered one of the easiest ways for investors to access crypto assets in the US via a fund, its structure makes it inefficient. Its value frequently detaches from that which Bitcoin holds.

Through the recent supplement filed, ARK may be seeking greater Bitcoin exposure through fewer costs, avenues with greater liquidity, and without having to endure GBTC’s premiums.

Bitcoin ETF approvals delay

The move by Ark Investment Management comes amid a long waitlist piling of at least 18 applications for Bitcoin-based Exchange Traded Fund (ETFs) filed with the US SEC.

Grayscale itself has been waiting for regulatory approval to convert its popular trust GBTC into an ETF. Other firms that have filed for listing a Bitcoin ETF in the U.S. include Fidelity, Global X, SkyBridge Capital, VanEck, Valkyrie, NYDIG, and others.

However, the Securities and Exchange Commission has yet to approve any physical Bitcoin ETF in the US, and such approval may not happen anytime soon.

Recently SEC chairman Gary Gensler signalled that he would consider a futures-based Bitcoin ETF under strict rules. Following Gensler’s remarks, several companies filed for futures-based Bitcoin ETFs with the SEC.

If even Gensler seems more comfortable with futures-based Bitcoin ETFs than physical ones, they are likely still far off to be approved.

This is due to SEC concerns. Besides the worry of fraud and volatility within the crypto landscape, the SEC is also concerned with how the demand for physical Bitcoin ETFs would impact the overall market.

Cathie Wood’s Ark Invest Purchases Twitter Shares Worth $55.34 Million

Cathie Wood’s investment firm Ark Invest bought 829,907 shares worth $55.34 million of Twitter shares on the day in which the popular social media giant led by Jack Dorsey started allowing users to send and receive tips using Bitcoin as part of a broader push to help users make money from the service.

What is interesting in the announcement of Wood’s purchase is the timing. On Thursday, September 23, Ark Invest used two of its ETFs (the ARK Innovation ETF and the ARK Next Generation Internet ETF) to purchase Twitter stocks – the same day after Twitter, the popular social media firm, launched a feature that enables users to send and receive tips in Bitcoin.

The Investment firm’s flagship fund ARK Innovation ETF bought 661,141 shares in the company, while the ARK Next Generation Internet ETF purchased another 168,766 shares.

Following the announcement of the Bitcoin tipping feature, Twitter shares climbed 3.80% higher on Thursday to close at $66.69.

Ark Invest already owned shares in Twitter. Just a month before booking some profits in August, the popular investment company had bought one million shares in Twitter after Jack Dorsey told investors that the flagship cryptocurrency Bitcoin would be part of the social media company’s future.

As a result, Twitter has become ARK’s third-largest investment out of about 50 stocks.

Cathie Wood’s Investment Strategy

Cathie Wood, the CEO of ARK Invest, appears to have taken the investing world by storm.

Last year, Wood’s flagship fund ARK Innovation ETF outperformed the greater market by 9x – 149% versus 16%, which earned her recognition as the best stock picker of that year.

With Wood’s investing strategy focused on disruption in tech, it makes sense that ARK’s exchange-traded funds embrace cryptocurrencies.

Cathie Wood’s Twitter bet reflects her thinking that ongoing regulatory issues for cryptocurrencies will be manageable. Agencies across the globe have intensified their scrutiny of exchanges and cryptocurrencies as they have become more popular.

On September 14, Wood made a bullish prediction for Bitcoin, stating that it could soar to as much as $500,000 in five years, one of the most ambitious predictions on Wall Street.

Besides that, ARK Investment management firm recently gave itself clearance to purchase Canadian Bitcoin exchange-traded funds.

On September 13, the asset management company revised the prospectus for its ARK Next Generation Internet ETF to open the possibility of investing in Bitcoin exchange-traded funds (ETFs) in Canada.

According to an amended SEC filing for the ARK Next Generation Internet ETF, the fund may invest in the Grayscale Bitcoin Trust (GBTC) or other pooled investment vehicles in Bitcoin, like exchange-traded funds that are domiciled and listed for trading in Canada (Canadian Bitcoin ETFs).

The ARK Next Generation Internet ETF already invests in Bitcoin indirectly through the Grayscale Bitcoin Trust. GBTC is the second-largest holding in the ETF, with a 5.52% weight worth more than $313 million.

Wood also owns shares (stocks) in three prominent pubic firms (Robinhood, Coinbase, and Square Inc), is active in cryptocurrency adoption and stand to benefit.

Image source: Bloomberg

Why Cathie Wood’s ARK Investments Skipped Buying the First Bitcoin Futures ETF Shares?

While investors bought huge amounts of the ProShares Bitcoin futures shares during the opening day, famous crypto bull Cathie Wood was not among them.

Speaking at the Milken Institute Global Conference on Tuesday as part of the interview with Bloomberg media, Wood talked about the ETF’s debut and said Ark held off purchasing ProShares Bitcoin Strategy ETF (BITO), citing tax implications.

“No, we did not [invest]. We’re looking at this very carefully […] there are some tax ramifications we’d like to understand more having to do with contango versus more normal backwardation,”

Wood was talking about the structure of the forward curve, whereby contango refers to the case whereby the forward price of a futures contract is higher than the spot price. Backwardation is the opposite when the forward price of the futures contract is lower than the spot price.

Bitcoin futures are often in contango. That is a possible reason institutional investors such as Ark took a wait-and-see approach during the launch day of ProShares Bitcoin futures debut on the New York Stock Exchange market.

Jeffery Halley, a senior market analyst at Oanda, gave some important explanations regarding the impact of contango on futures contracts like the ProShares Bitcoin futures ETF.

“Longer-dated contracts are more expensive than the front month. That means you lose money rolling expiring contracts into the new front month. They probably want to see an orderly roll with decent two-way liquidity and a shallower contango,” he stated in his Wednesday note.

As a result, Halley saw a thin trading volume for ProShares Bitcoin futures ETF from institutional investors like Ark Invest on Tuesday. Such institutions did not actively participate in buying BITO shares.

Overall, Wood still remains confident in Bitcoin since she started investing in the cryptocurrency believing that it could become as huge as the monetary base of the US, which stood at trillions of dollars. Currently, cryptocurrencies have a market valuation of $2.5 trillion, with Bitcoin holding almost half at $1 trillion.

During the interview at the Milken conference, Wood said: “This is the new bank – digital wallet – and it’s going to be true in this country. It’s going to be true around the world.”

Wood’s Investment Strategy

Cathie Wood’s ARK is a heavy bitcoin investor.

As reported by Blockchain.News in June, Ark invest, the investment company run by long-time Bitcoin bull Wood, applied with the US Securities and Exchange Commission for an intent to launch an EFT to track Bitcoin futures, but cautioned that it was not likely to proceed until issues revolving tax liabilities for retail investors are resolved with market regulators.

Wood has been a long-time proponent of cryptocurrency. She has exposure to the ups and downs of cryptocurrencies through the performance of leveraged stocks like Square and Coinbase in her various innovation-focused ETFs.

Cathie Wood’s Ark Invest Purchases $79.4M of Robinhood Shares after Crypto Price Fall

Ark Invest, the investment management firm led by Cathie Wood, took advantage of a decline of Robinhood shares last week on Wednesday, October 27, following the firm’s earnings and purchased almost $80 million in value.

Three of the Ark Invest’s funds (ARK Innovation, ARK Next Generation Internet, and ARK Fintech Innovation ETF) purchased a collective 2.29 million shares of RobinHood for $79.4 million.

Wood’s Ark jumped on a 10% decline in retail-trading platform Robinhood and bought a total of 2.29 million Robinhood shares spread across its three funds. ARK Fintech Innovation ETF purchased 140,664 shares of Robinhood, ARK Innovation ETF added 914,957 shares, and ARK Next Generation Internet ETF purchased 236,190 shares.

On Wednesday last week, Robinhood trading platform announced a decline of 78% of its cryptocurrency revenue – from $233 million in Q2 to $51 million in Q3 – the dip drove the prices of the company’s shares down below its July initial public offering price of $38.

The firm caused disappointments to investors when it announced its Q3 earnings which missed expectations because of a drop in its cryptocurrency trading activity from all-time highs witnessed in the previous quarter.

Earlier in the week, Ark Invest also sold some of its Tesla holdings – a total of 57,106 shares of Tesla stock, worth $59 million – when the electric carmaker hit a market valuation of $1 trillion. Wood has been clear about her bullish prediction on Tesla. In March, the Ark boss predicted that Tesla stock would hit $3,000 from around $1,000 which it stands currently.

Furthermore, Ark also purchased the dip with $60 million in Twitter stock on Wednesday last week after the popular social media firm disclosed a drop in its customer base in its earnings report, causing the price of the company’s shares to fall by almost 11%.

Bitcoin ETF Investing

While Ark Invest is big on crypto assets, investing in Bitcoin and crypto-related stocks such as the Grayscale Bitcoin Trust, Coinbase, Tesla, Square, and RobinHood, the firm did not buy the newly-launched US Bitcoin futures ETF.

As reported by Blockchain.News on October 21, Cathie Wood disclosed that Ark Invest did not join the buying frenzy around the ProShare Bitcoin Strategy ETF. The renowned US investor stated that tax ramifications informed her decision to take time to understand the tax implications.

However, Ark Invest has its own plans in the Bitcoin ETF space. In June, the company joined a long list of firms seeking the SEC’s approval to launch a US Bitcoin ETF, which is pegged to the current price of the cryptocurrency while allowing investors exposure without actually purchasing and taking custody of the crypto asset.

1Bn Crypto Users Forecasted in the Next Decade, Says Coinbase CEO

Brian Armstrong, CEO of Coinbase Global Inc, said there would be as many as 1 billion users of cryptocurrencies within the next decade.

Bloomberg reported, citing Armstrong’s remarks during a commentary about price volatility related to the cryptocurrency market at Monday’s Milken Institute Global Conference.

There are currently only about 200 million users of cryptocurrencies in the global market.

During the meeting with Cathie Wood, the CEO of Ark Invest, who made a bullish prediction on bitcoin Ryan Armstrong said:

“My guess is that in 10-20 years, we’ll see a substantial portion of GDP happening in the crypto economy,”

DeFi is able to provide almost all financial services, with traditional and central institutions, usually banks, but on the blockchain. Any traditional service provided by a financial institution can be provided through DeFi. In short, Defi is a blockchain-based financial service mirrored by conventional financial services, creating new services or derivatives derived from the unique capabilities of blockchain. Because Defi does not require intermediaries like traditional banks, it can freely trade tokens or borrow tokens.

Meanwhile, Wood believes Bitcoin to be a game-changer by explaining why the cryptocurrency is soaring and gaining traction as a hedge, saying that she considers decentralized finance is great promising, urging the industry to look up to the issue of talent acquisition by adding that:

“In the case of DeFi and next-generation internet, we are seeing a lot of financial companies losing talent to crypto. So they have to take it seriously, or else they are going to be hollowed out.”

As the cryptocurrency market continues to expand, Coinbase has taken steps to expand its footprint to the rest of the world by acquiring and investing in large exchanges elsewhere.

In March, Coinbase reportedly announced plans to acquire a Brazilian holding company called 2TM, the parent company of Mercado Bitcoin – a Bitcoin exchange platform from Brazil – which is regarded as the largest crypto exchange in the Latin American region.