Ark Invest is upping its crypto risk appetite.
Cathie Wood’s future-themed investment firm trimmed $5 million in long-held bluechip favourite Robinhood over the past week, according to the firm.
At the same time, it added nearly $30 million of exposure to Tom Lee’s crypto treasury company BitMine, and Peter Thiel-backed digital assets platform Bullish.
Ark Invest is “definitely comfortable sliding down the risk curve, ”Spencer Yang, managing partner at crypto investment firm BlockSpaceForce, told DL News
“The underlying assets of BitMine is Ethereum which they are not a stranger to,” Yang said, while “Bullish has significant Bitcoin holdings.”
“It’s great to see Ark leading the way and buying stocks that are unique in the market,” Yang said.
The moves came as Robinhood’s stock has surged nearly 300% since April, catapulting its market cap to $105 billion. As of September 10, Ark still has $660 million in Robinhood shares.
Ark “isn’t so much dumping their stocks as taking profit on very good trades and looking for the next opportunities,” Annabelle Huang, founder of institutional execution firm Altius Labs, told DL News.
She pointed to Ark’s BitMine purchase as “a signal that institutions see Ethereum as the default blockchain for stablecoins and tokenised assets.”
BitMine has rapidly grown into the world’s largest corporate Ethereum holder, while Bullish has emerged as a newer publicly-traded alternative to flagship US exchange Coinbase after a blockbuster IPO.
The reasoning may be as simple as rotating into a cheaper opportunities, Huang said.
Shane Molidor, founder of crypto-focused advisory firm Forgd, told DL News that being “long on crypto treasury stocks … can be wise in a bull market because of their increased upside potential.”
Risk signals
Ark’s deployment into BitMine comes as many treasury firms are trading below the value of their Bitcoin holdings, undermining the “perpetual money printer” model of issuing new shares to buy more BTC.
“We’re starting to see digital asset company stock prices diverge from the underlying crypto prices, which is making investors question whether they are a worthwhile investment,” Dom Kwok, a former Goldman Sachs analyst, told DL News.
Update September 10: This story has been updated to describe Forgd as a crypto-focused advisory firm and not as a crypto-focused investment bank.
Lance Datskoluo is DL News’ Europe-based markets correspondent. Got a tip? Email at lance@dlnews.com.
