ARK Invest Doubles Down on Crypto-Linked Equities Amid Market Sell-Off

Cathie Wood’s ARK Invest has significantly increased its exposure to crypto-related equities, notably Bullish and Robinhood, during a recent broad sector sell-off. According to trade notifications from Tuesday, ARK Invest’s flagship ARK Innovation ETF (ARKK) purchased a substantial amount of shares in both companies, even as crypto stocks faced sharp declines.

Bullish: ARK Invest bought 356,346 shares, valued at $21.2 million, of Bullish.
Robinhood: The firm also purchased 150,908 shares of Robinhood Markets, worth $16.2 million.

This move follows ARK Invest’s significant purchase of 2.53 million shares of Bullish last week, worth $172 million. This acquisition came after Bullish made its debut on the New York Stock Exchange. The buying spree for Robinhood also continued, with ARK adding shares on three consecutive sessions—$14 million on Monday and $9 million on Friday.
ARK’s recent purchases mark a shift, as the firm had sold large portions of Robinhood shares last year to comply with Rule 12d3-1, which limits ETF holdings in broker-related stocks to no more than 5%.
A Broad Crypto Stock Sell-Off
Despite ARK’s continued investment in Bullish and Robinhood, both stocks saw significant losses on Tuesday:

Bullish: Closed down 6.09% at $59.51, and dropped another 3.24% in after-hours trading.
Robinhood: Fell 6.54% to $107.50, with an additional 1.23% decrease in after-market trading.

The crypto-exposed equities sector as a whole was also in the red:

Coinbase: Down 5.82%
Galaxy Digital: Off 10.06%
Strategy: Dropped 7.43%
Circle: Slipped 4.49%

This broad sell-off wasn’t limited to crypto stocks alone, as the Nasdaq Composite also saw a decline of 1.46%, reflecting wider market jitters.

The sell-off followed a surge in crypto stocks last week, driven by rate-cut optimism. Investors were hoping for dovish signals from the US Federal Reserve, particularly as Chair Jerome Powell’s Jackson Hole speech looms this Friday. Many are awaiting potential clues about future monetary policy, which could significantly impact both the broader market and crypto assets.
Bullish IPO Surge
Despite the broader downturn, Bullish had an impressive debut on the NYSE last week. The company, which operates a cryptocurrency exchange and owns CoinDesk, priced its IPO higher than initially expected, at $37 per share, raising $1.1 billion by offering 30 million shares.

The first trading session saw Bullish shares soar by 83.8%, reaching as high as $118—more than 215% above the IPO price. However, this rally was short-lived, with the stock later retreating, closing at $90.

ARK Invest’s ongoing bullish stance on crypto-linked equities highlights a belief in the sector’s long-term potential, even as the market experiences short-term volatility. Investors are eagerly awaiting Jerome Powell’s speech at Jackson Hole later this week, as any dovish hints could provide a much-needed catalyst for a rebound in both crypto and broader financial markets.

With Bullish and Robinhood facing declines despite ARK’s continued investments, the next few days could prove pivotal for crypto-linked stocks as they navigate broader market trends and investor sentiment.