Cathie Wood’s flagship ETF – the ARK Innovation Fund – performed better in January than in any other month since it launched in 2014.
This comes after a brutal down year for the fund, which focuses on long-term investment in disruptive technologies – including the crypto industry.
ARK Bounce Back
In January, ARK registered a total gain of about 28%, with a 3.7% gain on Tuesday alone. Starting the month at roughly $30, it trades for $39.72 at writing time.
The gains are a reassuring sign after the tech-focused fund, which fell 21% in 2021 and a whopping 69% in 2022 amid tightening macroeconomic conditions that ravaged stocks and crypto alike.
January, however, was kinder to the tech industry, as markets regained confidence in response to promising inflation data in December. With once-red-hot inflation beginning to cool, some believe the Federal Reserve may be prepared to reverse course and lower interest rates again, which would be a boon for markets.
Bitcoin has risen by 41% since early last month, while the NASDAQ has climbed by roughly 14%. Each saw pronounced gains on Wednesday shortly after the Federal Reserve announced a 25 basis point rate hike – milder than those seen in previous months.
One of the biggest winners since early January, however, is Tesla – up 68% since Jan 3 after tumbling 64% last year. It was one of the main drivers of ARK’s success last month after Wood aped into Tesla stock in recent weeks with over $19 million.
Other big winners for ARK included Spotify and Roku, each up 45% and 49% across the month.
ARK’s Crypto Investments
ARK is heavily invested in Coinbase, America’s largest crypto exchange, which accounts for 4.5% of the firm’s portfolio. That’s a position worth $347 million – even after dumping some shares back in July. Though it’s still down 66% on the year, COIN rose by 95% year to date.
ARK’s other major crypto play is in GBTC – the closest form of exposure the fund has to actual Bitcoin. Shares of the fund now trade for $12.54 each, up 52% since last month. While ARK scooped up $4.5 million worth of shares in the trust in November, it dumped 500,000 shares back on the market last month following its recovery.
Still, GBTC trades at a massive 42% discount against its underlying Bitcoin holdings, due to regulatory refusal to allow the fund to become a standard spot ETF. Wood has attempted to launch her own Bitcoin ETF alongside 21Shares, but has met the same resistance.
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