Cathie Wood's ARK Invest Expands Crypto Bets Despite Regulations

Cathie Wood's ARK Invest Buys $19.9 Million of Block Inc. Shares

Amidst Regulatory Actions on Crypto Exchanges

Cathie Wood, the CEO of ARK Invest, has recently invested $19.9 million in Block Inc. shares through ARK Invest's ETFs. This investment follows her earlier purchase of $21 million worth of Coinbase shares. It is noteworthy that the U.S. Securities Commission has filed lawsuits against major exchanges, namely Binance and Coinbase, for alleged regulatory violations. However, Wood's investment decision indicates her continued interest in the cryptocurrency industry.

While Coinbase's share price suffered a decline following the SEC lawsuit, Block Inc.'s shares experienced a significant rise during the same period. ARK Invest acquired 305,573 new shares of Block in six separate purchases between June 7 and 8, making it the fourth largest holding for the company, accounting for 4.81% of their portfolio. The majority of these shares were added to the ARK Innovation (ARKK) ETF, with smaller amounts allocated to the ARK Next Generation Internet (ARKW) and ARK Fintech Innovation (ARKF) ETFs.

Cathie Wood Continues to Show Confidence in Coinbase Amidst Regulatory Challenges

ARK Invest also purchased 419,324 shares of Coinbase, worth approximately $21.6 million, on June 6. This occurred when Coinbase's stock price dropped nearly 20% overnight due to the SEC lawsuit. Despite the challenges faced by these crypto firms, Wood believes that the intensified regulatory scrutiny on Binance could benefit Coinbase in the long run, as it eliminates competition.

Coinbase now constitutes the seventh largest holding for ARK Invest, accounting for 4.39% of their portfolio. In total, they hold 11,440 COIN shares across the ARKF, ARKK, and ARKW ETFs. Since Q1, ARK Invest has increased its COIN shares by 8.2%, following previous increases of 20.2% and 25.2% in Q4 2022 and Q1 2023, respectively.

Wood remains bullish on Coinbase and Bitcoin in the long term. She believes that Bitcoin, as a decentralized currency, thrives in times of market turbulence and regulatory uncertainty, providing an alternative to traditional financial systems with counterparty risk. In April 2022, Wood predicted that Bitcoin would reach $1 million by 2030. Despite acknowledging the toll of the SEC's regulation-by-enforcement approach on cryptocurrency innovators in the U.S., Wood remains optimistic about the future of the industry. 

Also read - Moody's Downgrades Coinbase Rating, Berenberg Sees Shares as 'Uninvestable