Celebrity money manager Cathie Wood has talked the talk in support of cryptocurrencies for quite some time, predicting in January that bitcoin will hit $1 million by 2030.
She continues to walk the walk too. As cryptocurrency conglomerate FTX has melted down into rubble, the chief executive of Ark Investment management has been snapping up shares of Coinbase Global COIN like nobody’s business.
Coinbase is the country’s largest cryptocurrency exchange. Its stock is hitting the trash bin, plunging 82% year to date, as digital currency trading dries up amid the industry’s turmoil. Coinbase lost $544.6 million in the third quarter.
But unlike FTX, Coinbase doesn’t operate like a company formed by a few buddies after they graduated from college. Coinbase is a legitimate entity, as far as we know anyway, with audited financial results.
It could be that cryptocurrency trading will rebound, pushing Coinbase’s financial performance and stock price up as well, though the opposite outcome seems just as possible.
Wood is obviously betting on the first scenario. Ark funds have loaded up with more than 1.3 million shares of Coinbase since the beginning of November, a stash recently worth $57 million.
Coinbase represents the 15th biggest holding in Wood’s flagship Ark Innovation ETF (ARKK) – Get Free Report, totaling $244.3 million. Ark funds hold about 4.7% of Coinbase’s total outstanding shares, according to Bloomberg.
Meanwhile, Ark’s ETFs have tumbled this year, as their tech holdings suffered from weak earnings. Wood has defended herself by noting that she has a five-year investment horizon.
And the five-year track record of Ark Innovation ETF could indeed give investors comfort up to May 9. The fund’s five-year return beat that of the S&P 500 until then. But the five-year annualized return of Ark Innovation totaled only 0.84% through Nov. 21, far behind the S&P 500’s 10.67% return.
The fund’s performance also falls well below…
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