For some time now Cathie Wood, ARK Invest has been continuing to sell shares in crypto funds, such as the Grayscale Bitcoin Trust (GBTC), and to buy Robinhood shares.
Yesterday, for instance, it seems that they invested $9.5 million in a single day to buy 1.1 million Robinhood shares for three of its managed funds, ARK Innovation ETF (ARKK), ARK Next Generation Internet ETF (ARKW), and ARK Fintech Innovation ETF (ARKF).
Summary
Gains with Bitcoin
At the time of the peak, ARK Invest owned more than 9 million shares of the Grayscale Bitcoin Trust (GBTC). It was July 2021, and the price of Bitcoin was about $35,000.Â
Over the months since then, ARK Invest has sold as many as 4.4 million GBTC shares, particularly between late 2021 and early 2022, and between late 2022 and early 2023.Â
Also starting at the end of October, he began selling GBTC shares again, partly because at that point the discount to NAV began to fall.
In this way he cashed in several million dollars, but still kept GBTC as the main source of exposure for his ARK Next Generation Internet (ARKW) ETF, which is then also the only one that has GBTC in its portfolio.
In other words, he monetized what he had purchased in 2020 and early 2021, also taking advantage of the fact that over the past few months the discount to NAV has narrowed.
Cathie Wood: Robinhood purchases instead of crypto
Most of Robinhood’s share purchases were actually made in 2021, so much so that yesterday’s large purchase is a real anomaly compared to the policy ARK Invest had held in recent months.
Until yesterday it held about 30.6 million shares, but with yesterday’s purchase it becomes almost 32 million. Suffice it to say that it had been holding always about a little more than 30 million since May 2022.
So this is probably a real reallocation of funds, since ARK Invest’s ETFs are managed funds.
Robinhood stocks are part of the basket of as many as 4 of ARK’s managed ETFs, namely Next Generation Internet ETF (ARKW), the same as GBTC, Innovation ETF (ARKK), which is ARK’s largest ETF, but also FinTech Innovation ETF (ARKF) and IPO ETF.
Note that in none of these ETFs do Robinhood shares exceed 5%.
Robinhood’s expansion: Cathie Wood prefers it to crypto
The reason for these investments may be related to Robinhood’s European expansion campaign.
In fact, already in the coming weeks it is expected to land crypto trading precisely in the EU and UK.
Robinhood makes it very easy to trade using a simple app, without even having to have a bank account. This is why it has been very successful, especially with the younger generation.
It is obvious, however, that it is precisely the younger generation that most wants to invest in crypto, and so the company is expanding the service to include crypto trading outside the US as well, where it has been active for years now.
It is possible that Cathie Wood envisions a strong expansion of Robinhood in Europe, which is the second largest market for this type of service in the West.
Coinbase
Note that during 2023 he also dumped Coinbase shares.
It had peaked only in June this year, with more than 11.3 million shares, down now to 9.5 million.
Most of the purchases had been made in 2021 and 2022, and as soon as the price returned to $110 it began selling them, albeit only partially.
To date, Coinbase is still the single largest asset in ARK Invest’s ETFs, so much so that the shares owned by the company in total are worth more than $840 million.
In second place is Roku with 770 million, while Robinhood is only in 17th place with 260 million. GBTC shares owned, on the other hand, are worth only $128 million.
