Cathie Wood is well-known for buying the dips in stocks she likes and this past week was no exception. She decided to take advantage of the recent crypto correction and added to positions in both the ARK Innovation ETF (ARKK) and the ARK Next Generation Internet ETF (ARKW).
The more notable of the two transactions was the addition of just under 1.2 million shares of the Grayscale Bitcoin Trust (GBTC) to ARKW.
Wood has used GBTC for bitcoin exposure in her ETFs for a while, but the trust’s position in ARKW has been steadily growing for months. During the tail end of 2020, GBTC accounted for around 2% of ARKW’s total assets, but that position has grown to as much as 5% of the portfolio in April. As it stands today, GBTC is ARKW’s 7th largest holding at around 4.2% of assets.
On a percentage basis, the latest buy was a relatively modest jump from 3.9% to 4.2%, but Wood has long been a crypto bull and has been willing to heavily overweight bitcoin in a way that most ETFs have not dared (or taken a position at all). GBTC is not necessarily the best vehicle for bitcoin exposure – its 2% expense ratio is high and its 7% discount to market value has hurt shareholder returns – but it’s certainly the easiest to access.
While it’s not a more direct investment in bitcoin or ethereum, ARKK added some crypto-adjacent exposure of its own. It added more than 280,000 shares of Coinbase this past week.
Coinbase, of course, just debuted back in April so there’s not a lot of history to work with, but Wood has been steadily building her position since it went public. She started slow at first, but built her full position by around May. COIN’s weighting in ARKK has consistently been in the 3-4% range. Today, Coinbase is ARKK’s 10th largest holding at about 3.5% of assets.
ARKK has one of the largest ETF positions in COIN, although not quite as large as the 10% stake within the Bitwise Crypto Industry Innovators ETF (BITQ). Coinbase checks two big boxes that make it a great fit in the ARK portfolios – her belief in the crypto space and the companies that will benefit from it and the “buy on sale” style that she favors. Coinbase is trading at more than 30% below its $350 starting price.