What Ark Invest CEO Can Teach Us About Investing In Crypto Stocks


After the difficult previous year that triggered
several negative developments and sent crypto prices down by more than 75%,
2023 has begun with a bang for the industry.
The flagship cryptocurrency, Bitcoin, has made an impressive
rally, up by more than 40% since the start of the year. Other altcoins have
mimicked Bitcoin’s behavior and have soared in their values too. The rally has
also bled over to the crypto-focused stocks benefiting from the shift in
sentiment.
Cathie Wood, the CEO of investment management firm ARK
Invest, expects the shares of a couple of crypto stocks to deliver further
upside over the coming months.
Cathie shows why Coinbase is a good investment
Since the beginning of the year, Cathie Wood’s ARK Invest has
continued purchasing Coinbase shares amid the latest cryptocurrency market
decline.
Last week, Cathie Wood bought
additional shares of Coinbase crypto exchange for her company's exchange-traded
funds after purchasing them earlier this month.
On Friday last week, February 24, Ark Invest purchased 150,192
Coinbase shares to its ARK Innovation ETF (ARKK) and the ARK Next Generation
Internet ETF (ARKW), consisting of 128,396 shares and 21,796 shares,
respectively, as per its latest trade filing.
On February 13, Ark bought
another 162,325 shares of Coinbase exchange worth $9.26 million and split them across
the ARK Innovation ETF (ARKK) and the ARK Next Generation Internet ETF
(ARKW)—139,105 and 23,220 shares, respectively. This followed a series of other
purchases that the firm made between January 5 and January 11, when it bought a
total of $10.47 million worth of Coinbase stock.
The latest purchase means
that the famed investment management company currently holds $18 billion worth
of Coinbase stock, with a 4.58% stake in the cryptocurrency firm.
A measured approach
for individual investors
Cathie Wood is the leading investor more committed to the
high-flying tech and crypto sectors than anybody else. Her wide followers make her
investing strategies an important lesson for other investors.
Cathie has continued
to buy crypto stocks (such as Coinbase Global, Silvergate Capital, and
Grayscale Bitcoin Trust), especially buying the dips when stocks she likes come
down.
Based on her investing experience, Investors can purchase
cryptos by buying small amounts of several different coins. But a better way to
gain exposure to the industry is to invest in bigger and more established
companies that benefit from the increased popularity of crypto assets.
Crypto stocks can
be a great investment with astronomically high returns, but that comes with
substantial downsides. Investors should, therefore, analyze whether their
liquidity requirements, risk tolerance, and time horizon fit their investor
profile.
Such investments have lots of potential, but investors
should maintain
proper diversification in their investing strategies.
From the look, many of Wood's top choices for crypto stocks are
tremendous long-term buys. While many investors are fleeing
the crypto space, the ARK Invest CEO keeps the faith and remains optimistic
about the long-term value of her preferred crypto stocks and is investing
accordingly.

Nicholas Otieno
CBW - External Analyst
KENYA