Cathie Wood’s ARK Invest Invests in Bitcoin, Coinbase, and Tesla Even as the Three Other Investors Flee This Year
Kathy Wood keeps the faith. While many investors are fleeing Tesla and the crypto space, the CEO of ARK Invest remains bullish on the long-term value of Tesla, Bitcoin and cryptocurrency exchange Coinbase – all of which reached this year – and invests accordingly.
This week, ARK Investment Management funds bought nearly 75,000 shares of Tesla, nearly 300,000 of Coinbase, and more than 315,000 of the embattled Grayscale Bitcoin Trust, according to Bloomberg.
These investments are not for the faint of heart. Tesla shares are down about 61% from their peak late last year. Coinbase shares fell to an all-time low this week, down more than 80% for the year. Bitcoin, the largest cryptocurrency, has lost more than 60% of its value this year.
Wood’s optimism certainly isn’t sold to everyone. Such as Wall Street Journal This week, even many investors in the leading ARK Innovation ETF are reportedly losing faith. Shares in that fund are down about 60% this year.
But even with the recent collapse of FTX, which has shaken investors’ faith in all things cryptocurrency, Frank Downing, director of ARK Research, said in a statement. video The company posted on Twitter this month.
Saturday Wood chirp“The Bitcoin blockchain didn’t skip a beat during the crisis caused by opaque central players. No wonder Sam Bankman-Fried didn’t like bitcoin: it’s transparent and decentralized. He couldn’t control it.”
Her company also shared data on Bitcoin trading showing that the supply of the cryptocurrency held by long-term holders remained flat during November, indicating that these investors had “long-term focus and high conviction” despite the turmoil. In an interview with Bloomberg last month, she reiterated her prediction that Bitcoin would hit $1 million by 2030 (it’s now under $17,000), and said she “comes out of this smelling like a rose.”
As for Coinbase, she said the uncertainty surrounding FTX could actually help her.
“This is a regulated insider company,” Wood noted in an interview with Bloomberg last month. “I think Coinbase is going to come out looking very, very strong here. It just lost a very, very big competitor in FTX.”
Coinbase CEO Brian Armstrong spoke at a crypto event a few weeks ago, after the crash, that Coinbase is a publicly traded company and therefore more transparent than FTX.
“You can read our financials,” Armstrong said. “Audited by a third party, you don’t have to trust us. All client funds are segregated. We don’t invest any money from clients without their express direction.”
Mazars, a French accounting firm, this week halted work on securing assets held in reserve by cryptocurrency exchange Binance and other players in the space. Crypto firms have been unable to sign deals with the Big Four accounting firms as they sought to boost their credibility amid the FTX fallout.
Wood also recently reiterated that she’s not worried about Tesla. This week, a major shareholder called for a new CEO to replace Elon Musk, who he said was too distracted by reshaping Twitter to do the job properly.
According to recent research from S&P Global Mobility, more automakers will pile into the EV space with lower-priced alternatives—especially with models costing less than $50,000, “where Tesla isn’t really competing yet.” It predicted that Tesla’s market share for electric vehicles would fall below 20% by 2025, down from 65% this year (during the third quarter).
But Tesla “acquires, and will continue to do so, a disproportionate share of a market that we believe will make up 85% to 95% of all cars sold in the world by 2027,” she told Bloomberg. “This is on autopilot.”
Amid doubts about its investments and strategy, Wood recently tweeted that the companies in her fund “sacrifice short-term profitability for explosive, profitable long-term growth.”
This story originally appeared on Fortune.com
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