The firm led by Cathie Wood has once again executed its well-known Ark Invest investment strategy, taking advantage of the recent price drop to increase its exposure. Ark Invest acquired significant stakes in key sector companies such as Coinbase, Circle, and BitMine this Monday. The fund manager thus reaffirms its long-term bullish conviction, challenging the temporary bearish trend that affected equity markets linked to cryptocurrencies.
The most notable purchases focused on BitMine Immersion Technologies and the US exchange Coinbase, adding assets with a combined value exceeding 33 million dollars. Specifically, across three of its actively managed ETFs, the firm added more than 550,000 shares of BMNR valued at approximately 17 million dollars. On the other hand, it also incorporated nearly 65,000 shares of COIN, with a market valuation close to 16.5 million dollars at the time of the operation.
In addition to these two large bets, the fund diversified its capital by injecting liquidity into other relevant players in the digital ecosystem that also suffered discounts in their share price. Ark allocated around 11.8 million dollars to stablecoin issuer Circle, 5.3 million to the exchange Bullish, and an additional one million in Brera Holdings. Likewise, shares of this trio of companies had registered drops of at least 6% during the last five trading sessions.
Is this the ideal time for aggressive institutional accumulation?
Currently, Coinbase consolidates itself as the firm’s third-largest holding, while Circle and BitMine occupy the 12th and 14th positions respectively in its global portfolio. According to public data on Ark’s holdings, the firm now holds 609 million dollars in COIN shares, along with 323 million in Circle and 275 million in BitMine. This methodical accumulation suggests that Wood perceives current prices, such as COIN’s $251.88, as attractive entry points.
On the other hand, it is relevant to highlight that these acquisitions occur in a context where the price of Bitcoin has retreated significantly from its October all-time highs. Despite having rebounded 2.6% on Tuesday to 87,716 dollars, the leading cryptocurrency remains more than 30% below its record of 126,080 dollars. However, Wood has adjusted her expectations, reducing her price target for 2030 from 1.5 to 1.2 million dollars per unit.
How does stablecoin adoption influence projections?
Ark’s CEO justified this adjustment in her prediction citing the growing use and adoption of stablecoins in the global economy. According to her analysis, the proliferation of stablecoins minimizes one of the potential use cases that were originally attributed exclusively to Bitcoin. However, she maintains that the asset may have already seen its lows, arguing that institutional acceptance is disrupting and modifying the traditional patterns of the market’s four-year cycle.
Additionally, the firm also showed confidence in its own financial products by adding nearly 400,000 dollars in shares of ARKB, its own Bitcoin ETF. This operation was carried out while the asset price fell momentarily below the 86,000 dollar mark. Thus, the manager demonstrates consistency between her public discourse and her financial moves, betting fresh capital on the investment vehicles she herself promotes to her institutional and retail clients.
Finally, these aggressive buying moves amidst uncertainty send a clear signal to the rest of the market regarding the manager’s vision. Short-term volatility is viewed as a buying opportunity and not as an exit signal for investors with broad time horizons. It remains to be seen if this contrarian bet will bear fruit when the market resumes its bullish trend and these tech companies recover their previous valuations.
