Cathie Wood's fund is buying up crypto stocks on the downturn. Should we follow her example?

ARK Invest fund managed by Cathie Wood on December 15 began buying shares of cryptocurrency companies after their multi-day decline, CoinDesk noted. The attention of the fund Cathie Wood, in particular, attracted the attention of the securities of Coinbase, Bullish and Circle, which were under pressure.

According to information disclosed by the fund, of the $59 million ARK has allocated to buy shares of cryptocurrency companies, about $17 million went to Bitmine Immersion Technologies securities, $16.3 million to Coinbase, $10.8 million to Circle Internet Group, $9.9 million to CoreWeave and about $5.2 million to Bullish, CoinDesk points out.

Before ARK Invest announced its latest purchases, cryptocurrency companies' shares had been declining for several trading sessions in a row. On December 15, the day when Cathie Wood's fund analysts paid attention to them, Bitmine securities fell by more than 11%, Circle - by almost 10%, CoreWeave - by about 8%, Coinbase - by more than 6%, Bullish - by 4.6%.

The sharp sell-off in the sector comes amid a drop in the price of bitcoin - to $86 thousand, which is more than 30% below the peak price of the cryptocurrency, which bitcoin reached in early October, writes Barron's. Cryptocurrencies are falling amid a decline in investors' tolerance for risk. The same factor affects the decline in the value of shares of technology companies. Investors will closely follow the data on the labor market, which should be published on December 16: employment reports for October and November will be released, Barron's points out.

Following ARK Invest's reports of cryptocurrency acquisitions at the Dec. 16 premarket, Bitmine shares jumped 1.4%, Circle jumped 0.3%, Coinbase gained 0.5%, CoreWeave securities fell 1%, and Bullish fell 0.5%.

ARK Invest has long pursued a strategy of buying on drawdowns rather than chasing growth, using protracted crypto stock sell-offs to build positions even as prices continue to fall, CoinDesk writes.

Crypto-assets take a significant share in ARK's portfolio. The fund owns shares of Coinbase for about $609 million, Circle Internet Group for about $323 million, Bitmine Immersion Technologies for about $275 million, Bullish for about $194 million and CoreWeave for about $140 million.

ARK's build-up of cryptocurrency positions also shows how deeply crypto assets are integrated into its ETF fund structure, CryptoNews notes.

As of early November, ARK's total cryptocurrency positions through its ARKF, ARKW and ARKK funds exceeded $2.15 billion. The main contributors were positions in Coinbase, Robinhood, Circle, Bullish and BitMine.

In addition, ARK's portfolio includes ETFs investing in Ether and Solana staking - that is, products that allow you to earn income for participating in supporting the work of blockchains. These are the ETHQ/U and SOLQ/U funds. Overall, among ARK ETFs, the Fintech Innovation ETF (ARKF), focused on financial technology, has the largest share of crypto assets at 29%, followed by the Next Generation Internet ETF (ARKW) with a bet on internet technologies like cloud services, AI and digital platforms at 25.7% and ARK's flagship fund with a broad bet on breakthrough technologies, ARKK (17.7%).

This article was AI-translated and verified by a human editor