Cathie Wood Continues to Bet Big on Crypto
Cathie Wood's investment fund, Ark Invest, has been actively buying up shares of companies that have ties to cryptocurrency. The fund has purchased millions of dollars worth of Circle Internet Group (CRCL), Coinbase Global (COIN), and Robinhood Markets (HOOD). These three companies make up a significant portion of the ARK Innovation ETF's portfolio.
The largest share is in Circle, which issues the second-largest stablecoin by market cap, USDC. With $74 billion in circulation, USDC is backed by reserves of short-term Treasury bills and other interest-bearing assets. As the issuer, Circle captures the interest payments earned from those reserves, with a yield of 3.5% in Q2.
The Federal Reserve's rate decisions determine short-term yields, which affect Circle's reserve income. Despite this uncertainty, Cathie Wood's fund invested $16.3 million in Circle on March 24 and another $13.9 million in mid-July, with a final purchase of $3.4 million on August 31.
Coinbase Global is also a significant holding for Ark Invest, which purchased about $8 million of its shares on August 2 after a disappointing quarter sent the price lower. Coinbase operates the largest U.S. crypto exchange and aspires to do more than connect investors to spot purchasing. Its subscription and services revenue reached $555 million in Q2, with 88% of net revenue coming from something other than Bitcoin spot trading.
Rounding out the trio is Robinhood Markets, which has expanded into crypto with its launch of a new blockchain in July. Although it's still a tertiary line of business for the company, users have already paid $6.6 million in chain fees for transacting on the network, up from $3.6 million the prior month.