Ark Invest goes against the trend to buy the dip, investing 25 million in "these three" encryption concept stocks

Cathie Wood's Ark Invest continued to increase its exposure to Bitcoin-related stocks on Tuesday, despite the overall crypto market fall. According to trading disclosures, Ark Invest purchased Block shares for $13.5 million, Circle Internet Group CRC shares worth $7.6 million, and shares of the largest U.S. crypto exchange valued at $3.86 million.

Ark Invest 25 million USD crypto concept stock buying list

According to the trading report on November 25, Ark Invest purchased shares of Block for $13.5 million, $7.6 million worth of Circle Internet Group CRCL stock, and $3.86 million worth of COIN stock, covering multiple exchange-traded funds. On Tuesday, Ark Invest also added $1.52 million worth of Bullish stock, $878,794 worth of Robinhood Markets stock, and $2.8 million worth of its own spot Bitcoin ETF. The total buying amount for the day exceeded $25 million, indicating that Cathie Wood's long-term confidence in the crypto market is unaffected by short-term fluctuations.

This counter-cyclical strategy is a hallmark of Ark Invest's operational style. Cathie Wood is known for her disruptive innovation investment philosophy, which emphasizes buying technology stocks with long-term growth potential during market panic. The decline in cryptocurrency-related stocks coincides with the ongoing depreciation of the crypto market, primarily due to insufficient liquidity and uncertainties in the macroeconomic environment. Bitcoin is currently trading at $87,948, down from the historical high of $126,000 set six weeks ago, representing a fall of over 30%.

Ark mainly purchased shares of these three companies through the Ark Innovation ETF (ARKK). ARKK is Ark Invest's flagship fund, focusing on investing in technology companies with disruptive innovation potential. The fund's portfolio covers fields such as artificial intelligence, fintech, genomics, and blockchain. Including cryptocurrency-related stocks in ARKK shows that Cathie Wood views them as an innovative force equally important as tech giants like Tesla and Zoom.

Ark Invest Tuesday Purchase Details

Block (SQ): 13.5 million USD, the payment and Bitcoin company founded by Jack Dorsey.

Circle (CRCL): 7.6 million USD, USDC stablecoin issuer

The largest crypto exchange in the United States (COIN): 3.86 million USD, the largest compliant exchange in the United States

Bullish: 1.52 million USD, crypto exchange platform

Robinhood (HOOD): $879,000, retail brokerage

Ark Bitcoin ETF (ARKB): 2.8 million USD, self-managed spot ETF

ARKK Holdings Structure Reveals Cathie Wood's Crypto Layout

As of Tuesday, COIN is the fourth largest holding of the fund, valued at $391 million, accounting for approximately 5.22% of its portfolio. This weight indicates COIN's strategic position within ARKK. As the largest compliant cryptocurrency exchange in the United States, COIN is seen by Cathie Wood as a leading infrastructure player in the cryptocurrency industry. COIN's business encompasses retail and institutional trading, custody services, staking services, and blockchain infrastructure, with its revenue highly correlated to the trading volume and asset prices in the crypto market.

ARKK also holds $179 million in Circle, accounting for 2.39% of the fund. Circle, as the issuer of the USDC stablecoin, plays a key role in the crypto market. USDC is the world's second-largest stablecoin after USDT, with a market capitalization exceeding $40 billion, widely used in DeFi protocols, centralized exchanges, and cross-border payments. Circle's business model is relatively robust, generating interest income through holding USDC reserves without directly bearing the risks of cryptocurrency price volatility. The inclusion of CRCL stock indicates that Ark Invest is optimistic about the long-term value of stablecoins as a foundational infrastructure for crypto finance.

ARKK holds Block assets valued at 85.2 million USD. Block, a financial services and technology company focused on encryption, was co-founded by Jack Dorsey and includes two major businesses: Cash App and Square. Cash App allows users to buy and sell Bitcoin and offers Bitcoin Lightning Network payment functionality, making it one of the most popular Bitcoin retail investment platforms in the United States. Square provides payment processing services for merchants and supports Bitcoin payments. The revenue from Block's Bitcoin-related businesses accounts for a significant proportion of its total revenue, making it a typical Bitcoin concept stock.

This holding structure shows that Cathie Wood's crypto layout covers multiple links in the industry chain: COIN provides trading infrastructure, Circle offers stablecoin financial channels, and Block brings cryptocurrencies into everyday payment scenarios. This diversified allocation not only disperses risk but also allows for comprehensive benefits from the growth of the cryptocurrency industry.

The stock price fall becomes a buying opportunity for Ark Invest

Block closed up 2.96% on Tuesday, reporting at $63.69, but still fell 20.54% over the past month. USDC issuer Circle dropped 3.62% yesterday, reporting at $70.11, down 51% from a month ago. COIN also fell 0.72% on Tuesday, down 30% over the past month. This collective plunge has provided Ark Invest with the opportunity to buy the dip. The company has steadily increased its holdings in more crypto-related stocks in recent weeks, taking advantage of the recent poor market performance.

The 51% monthly decline of Circle is particularly astonishing, far exceeding the declines of COIN and Block. This excessive drop may stem from the market's overly pessimistic reaction to CRCL stock. Circle is set to go public in 2024 via a SPAC merger, and as a newly listed company, its stock price volatility is typically higher than that of mature public companies. Additionally, the uncertainty surrounding stablecoin regulation may have exacerbated the selling pressure. However, fundamentally, Circle's business has not shown significant deterioration, with the market capitalization of USDC remaining stable and interest income continuing to grow. This divergence between price and fundamentals is precisely the opportunity that value investors seek.

Ark Invest's timing for buying is highly strategic. The purchase of $7.6 million after Circle's 51% drop in a month indicates that Cathie Wood believes the current price significantly undervalues Circle's long-term value. Similar logic applies to COIN and Block. Although these Bitcoin-related stocks are affected by fluctuations in the crypto market in the short term, their core businesses—transaction infrastructure, stablecoin issuance, and payment services—have long-term growth potential. As the cryptocurrency industry matures and institutional adoption accelerates, these companies' revenues and profits are expected to continue growing.

From the perspective of risk-reward ratio, when these stocks fall by 30%-50%, their downside potential is relatively limited, while their upside potential significantly increases. If the price of Bitcoin returns to $120,000, these stocks may rebound by 50%-100%, far exceeding the current decline. Ark Invest's continued buying indicates its judgment on the cyclical bottom of the crypto market: the current decline is a temporary washout, rather than a reversal of a long-term trend.

Diversified encryption portfolio covers all aspects of the industry chain

In addition to its three core holdings, Ark Invest has also made small increases in Bullish, Robinhood, and its own Bitcoin ETF. On Tuesday, it added $1.52 million worth of Bullish stock, $878,794 worth of Robinhood Markets stock, and $2.8 million worth of its own spot Bitcoin ETF. This diversified buying strategy shows that Ark Invest remains optimistic about the entire crypto industry ecosystem rather than just betting on a single company or niche.

Bullish is a cryptocurrency exchange platform supported by Block.one, focusing on institutional clients and high-net-worth individuals. Its business model is similar to COIN, but emphasizes compliance and institutional-grade services. Ark Invest's increased stake in Bullish indicates its optimism about the growth potential of the institutional crypto trading market.

Although Robinhood Markets is not a pure crypto company, its cryptocurrency trading business accounts for a significant portion of its revenue. Robinhood has a large retail user base and serves as an important channel for retail investors to enter the crypto market. Increasing its stake in Robinhood indicates that Ark Invest is optimistic about the growth of both the institutional market (COIN, Bullish) and the retail market (Robinhood).

Buying the in-house Bitcoin ETF (ARKB) is a direct exposure to Bitcoin. Although Ark Invest has been indirectly exposed to Bitcoin through holding Bitcoin-related stocks, directly holding a Bitcoin ETF offers a purer price tracking. This configuration shows that Cathie Wood is optimistic about Bitcoin itself, as well as the business ecosystem built around Bitcoin.