Ark Invest has taken a different approach as the broader crypto industry reels under pressure amid one of the largest market crashes. In a strategic development, the investment giant has bolstered its exposure to BitMine shares despite the Ethereum treasury company’s $6 billion in ETH paper losses.
Ark Invest Bets on BitMine Even as Ethereum Losses Mount
According to the latest reports, Cathie Wood’s Ark Invest has bought $6.25 million worth of shares in the largest Ethereum treasury company, BitMine. Ark Invest’s BMNR stock purchase underscores the firm’s confidence in Ethereum-linked businesses, despite the prevailing crypto market crash, with ETH emerging as one of the biggest losers.
In addition to the BitMine shares, Ark Invest has also expanded its exposure to other crypto-related stocks, including Circle, Bullish, Coinbase, and Block Inc. According to trade filings, Ark Invest has purchased a total of $24 million in crypto stocks.
Specifically, the company bought $9.4 million worth of Circle shares across two ETFs. The firm also invested $6 million in the Bullish crypto exchange. Smaller stock purchases included Block Inc. and Coinbase, as Cathie Wood’s firm bought $1.9 million and $1.25 million shares, respectively.
This development comes on the heels of BitMine’s latest ETH purchase. As CoinGape reported yesterday, the firm strengthened its Ethereum treasury, adding 41,788 ETH last week.
What Do These Crypto Stock Purchases Indicate?
Currently, the crypto market is experiencing a broader downturn, with top assets like Bitcoin, Ethereum, and XRP posting notable losses. This negative trend has widely impacted crypto-related businesses and stocks.
Significantly, with the latest crypto stock purchases, Cathie Wood is expressing her long-term commitment to crypto strategy. Amid the current bearish trend, the company is taking advantage of the lower prices.
By increasing its exposure to crypto shares, including the BMNR stocks, Ark Invest appears to be following a contrarian strategy. Cathie Wood is buying into companies she believes have strong long-term potential while prices remain depressed. She views the current market downturn as a buying opportunity rather than a setback.
It is also worth noting that Cathie Wood holds a positive outlook on the crypto market’s long-term potential. Recently, she posited that the gold price hike could lead to Bitcoin’s potential rally. She noted,
“Important to note is that the correlation between the bitcoin and gold prices has been 0.14 since early 2020, and that the gold price led the last two significant bull moves in the bitcoin price in the last two major cycles.”
Ethereum Price Slump Deepens BitMine’s Paper Losses
Reportedly, Tom Lee’s BitMine currently holds about $9.2 billion worth of Ethereum tokens, marking a sharp drop from its original investment of nearly $15.7 billion. This represents a decline of more than 41%, leaving BitMine with massive unrealized losses of about $6.6 billion.
This is primarily due to the crypto market crash, which severely hit the Ethereum price. Although the token managed to slightly surge today to $2,326, up 6%, ETH is still down by 20% and 26% in a week and a month, respectively.
Source: https://coingape.com/why-is-cathie-wood-buying-6m-bmnr-stocks-despite-bitmines-deep-ethereum-losses/