This ARK Fund Has a Big Bitcoin Stake. It’s Rising as the Currency Falls.

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Bitcoin was down about 18% over the previous week on Tuesday afternoon.


Dreamstime

Bitcoin’s worth, and crypto-related shares, have tumbled over the previous week as China has cracked down on cryptocurrency mining and banking. But one exchange-traded fund with massive holdings of the digital foreign money has made good points regardless.

The $5.8 billion

ARK Next Generation Internet ETF

(ticker: ARKW), run by star fund supervisor
Cathie Wood,
is certainly one of the ETFs with the most Bitcoin in its portfolio. That isn’t any shock provided that Wood has famously stated the digital foreign money would rise to as a lot as $500,000. 

As of Tuesday, the fund had a 3.6% weight, or $207 million price of shares, in the

Grayscale Bitcoin Trust

(GBTC), a closed-end fund holding Bitcoin in custody for its shareholders. The ETF additionally had a 3.3% weight, or $189 million price of shares, in the cryptocurrency trade

Coinbase

Global (COIN)

Those holdings are a drag on the fund, given Bitcoin’s hefty losses. Early Tuesday, the cryptocurrency tumbled under $30,000 for the first time since January, although it later recovered to about $32,500, for a lack of about 18% over the previous week. Coinbase is down 4% over that point.

The

ARK Next Generation Internet ETF,

although, has risen 4.6% throughout the identical interval, with a acquire of 1.7% on Tuesday alone. One constructive issue is that the Grayscale fund, which was already buying and selling at a low cost to Bitcoin’s worth, didn’t fall as a lot as the cryptocurrency itself.  

The ARK fund’s heavy holdings in different modern web shares have restricted the harm as effectively. Its second-largest holding,

Shopify

(SHOP), for instance, has gone up by 14% in the previous week. Other main holdings, such as Roku (ROKU),

Twilio

(TWLO), and

Unity Software

(U) have gained 19%, 12%, and 13%, respectively.

All these shares struggled earlier this yr as cyclical names gained favor and inflation worries flared up, however they’ve been on a regular upswing once more since mid-May.  

Bitcoin is now up simply 13% for the yr, and has misplaced greater than half its worth since hitting its report of $64,829 on the day in April that Coinbase went public. The ARK Next Generation Internet ETF is now simply barely under the place it was at the starting of the yr. At its low level for 2021, in the center of May, the fund was down 16% yr thus far.

Write to Evie Liu at [email protected]

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