Cathie Wood says this crypto crash is a massive opportunity, still sees Bitcoin soaring 6,000% to $1 million — here are her 3 big sector bets | Pages Da

‘You have to go through crises’: Cathie Wood says this crypto crash is a huge opportunity, but still sees Bitcoin soaring 6,000% to $1 million – here are her 3 big sector bets

It probably doesn’t feel good to be a crypto investor these days. Bitcoin is down 65% so far this year. And some are saying that this is not a “crypto winter” but rather “crypto extinction”.

Yet one expert remains bullish: Ark Invest’s Cathie Wood.

When asked if she still has her bitcoin forecast of $1 million per coin by 2030 during a Bloomberg interview, her answer was a resounding “yes.”

“Sometimes you have to fight tests, you have to go through crises to see the survivors first of all,” she says.

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Wood acknowledges that the ongoing crypto crisis may delay institutional adoption, but still believes bitcoin will come out of this “smelling like a rose.”

“Once they actually do their homework and see what’s happened here, I think they might be more comfortable moving to bitcoin and maybe ether as a first stop.”

Given that bitcoin is currently trading at around $16,400, her $1 million price target represents a potential upside of 5,998%.

As always, Wood puts her money where her mouth is. Here’s a look at how the super investor is betting on crypto.

Grayscale Bitcoin Trust (GBTC)

With the rise of bitcoin in recent years, quite a few bitcoin funds have entered the market. Grayscale Bitcoin Trust is one of them.

According to GBTC, its shares aim to reflect the value of its bitcoin holdings, minus fees and expenses. The fund says it has not achieved this goal because its shares have traded at a premium or discount to value that “has at times been substantial.”

So far this year, GBTC stock has fallen 75%.

The bankruptcy of cryptocurrency exchange FTX has sent shockwaves across the crypto space and is one of the reasons why investors have unloaded GBTC shares. As a result, GTBC is trading at a steep discount to its underlying asset – bitcoin.

That discount caught Wood’s attention. It was reported that Ark Investment Management on Monday picked up 176,945 shares of GBTC, worth about $1.5 million.

Coinbase Global (COIN)

If you’ve ever bought bitcoin from an exchange before, you know that there are usually transaction fees. And as more people rushed to buy cryptocurrencies, those transaction fees quickly increased.

That’s where Coinbase found its opportunity. As the largest cryptocurrency exchange in the US, it earns a transaction fee every time someone buys or sells cryptocurrency on its exchange.

Read more: Trade up while the market is down: Here are the best investment apps to pounce on ‘once-in-a-generation’ opportunities (even if you’re a beginner)

In the third quarter, Coinbase had 8.5 million users transacting monthly. It earned $366 million in transaction revenue and $211 million in subscription and services revenue.

Given the decline in cryptocurrencies, it’s no surprise that Coinbase shares have also experienced heavy volatility – down a painful 82% in 2022.

But the company remains in Wood’s portfolio. Ark Invest’s flagship fund Ark Innovation ETF (ARKK) holds more than 5.9 million shares of Coinbase, worth about $257.1 million.

block (SQ)

Wood’s Ark Innovation ETF also owns 6.26 million shares of Block, a digital payments technology formerly known as Square.

With the stake valued at $392.7 million, Block is currently ARKK’s fifth largest holding.

Management changed its name last December as “Square” had become synonymous with the company’s sales operations. But the move did little to cheer investors. In 2022, shares have fallen more than 60%.

While the company is far from a market favorite right now, it continues to deliver some very impressive numbers.

In the third quarter, total net sales increased 17% year-over-year to $4.52 billion. Gross profit was $1.57 billion, up 38% from a year ago.

The company is also a cryptocurrency play: Block generated $1.76 billion in bitcoin revenue and earned $37 million in bitcoin gross profit during the quarter.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.


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