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ARK Invest CEO Cathy Wood Advocates for Institutional Investment in Digital Assets While Selling $13.5 Million in Coinbase Shares

Cathy Wood, the CEO of ARK Invest, has made headlines recently with her comments on Bitcoin and the role of institutional investors in the cryptocurrency market.

Speaking on Bloomberg TV on March 21st, Wood expressed her belief that Bitcoin’s price hikes following the banking crisis will attract more institutional investors to the digital asset.

Wood argued that institutional investors should allocate between 2.5% and 6% of their assets to digital assets, a similar percentage to what they have historically allocated to new assets. She emphasized that Bitcoin behaves differently than the stock market, which makes it a valuable asset for portfolio diversification.

The ARK Invest CEO also commented on the recent trend of corporate finance departments holding Bitcoin on their balance sheets, noting that regulatory pressure has forced many companies to stop this practice. However, Wood believes that this trend will eventually resume as more institutional investors enter the market.

In a recent investment memo, ARK Invest highlighted the role of cryptocurrencies, including Bitcoin, as “safe havens” during times of market volatility. This is a significant departure from the traditional view of cryptocurrencies as risky and volatile investments.

Despite her bullish stance on Bitcoin, ARK Invest has recently sold shares of crypto exchange Coinbase (COIN). On Tuesday, March 22nd, ARK sold 160,887 shares of COIN, worth $13.5 million. This comes after a series of buys of Coinbase’s stock during the crypto winter of 2022. Throughout the year, COIN underperformed both Bitcoin and Ether, and its shares dropped 86%.

ARK’s most recent purchase of COIN was in early March when the company acquired over 350,000 shares of Coinbase, valued at $22 million. Year-to-date, COIN is up nearly 150%, closing the Tuesday trading day in the U.S. at $83.99. However, the stock is still down 54% over the last calendar year, having been listed in April 2021 at $342.

Despite the recent sale of COIN shares, ARK Invest has also announced the launch of a new private crypto fund, raising $16 million to invest in digital assets. This demonstrates the company’s continued confidence in the long-term prospects of the cryptocurrency market.

As institutional investors continue to enter the digital asset space, the role of Bitcoin and other cryptocurrencies in portfolio diversification is likely to become more significant. Cathy Wood’s comments on this topic are just one part of the ongoing conversation around the future of cryptocurrencies and their place in the global financial system.

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