Cathie Wood Says This Crypto Crash Is A Huge Opportunity, Still Sees Bitcoin Soaring 6,000% To $1 Million – Here Are Her 3 Big Sector Bets

‘You have to go through crises’: Cathie Wood says this crypto crash is a huge opportunity and still sees Bitcoin soaring 6,000% to $1 million – here are her 3 big sector bets

It probably doesn’t feel good to be a crypto investor these days. Bitcoin is down 65% year to date. And some are saying that this is not a “crypto winter” but rather “crypto extinction.”

Still, one expert remains bullish: Ark Invest’s Cathie Wood.

When asked if she still stands by her bitcoin forecast of $1 million per coin in 2030 during a Bloomberg interview, her answer was a resounding “yes.”

“Sometimes you need to battle test, you have to go through crises to see the survivors first and foremost,” she says.

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Wood acknowledges that the ongoing crypto crisis may delay institutional adoption, but still believes bitcoin will come out of this “smelling like a rose.”

“Once they’ve actually done their homework and see what’s happened here, I think they might be more comfortable moving into bitcoin and maybe ether as a first stop.”

Given that bitcoin is currently trading at around $16,400, her $1 million price target implies a potential upside of 5,998%.

As always, Wood puts her money where her mouth is. Here’s a look at how the super investor is betting on crypto.

Grayscale Bitcoin Trust (GBTC)

With the rise of bitcoin over the past several years, quite a few bitcoin funds have entered the market. Grayscale Bitcoin Trust is one of them.

According to GBTC, its shares aim to reflect the value of their bitcoin holdings, less fees and expenses. The fund says it hasn’t met that goal because its shares have traded at a premium or discount to value that “has at times been substantial.”

Year to date, GBTC shares are down 75%.

The bankruptcy of cryptocurrency exchange FTX has sent shockwaves across the crypto space and is one of the reasons why investors have unloaded GBTC shares. As a result, GTBC is trading at a steep discount to its underlying asset – bitcoin.

That discount caught Wood’s attention. It was reported that Ark Investment Management bought 176,945 shares of GBTC on Monday, valued at approximately $1.5 million.

Coinbase Global (COIN)

If you’ve ever bought bitcoin from an exchange before, you know that there are typically transaction fees involved. And as more people rushed to buy cryptocurrencies, those transaction fees quickly increased.

That’s where Coinbase found its opportunity. As the largest cryptocurrency exchange in the US, it earns a transaction fee every time someone buys or sells cryptocurrency on its exchange.

Read more: Trade up while the market is down: Here are the best investing apps to pounce on ‘once-in-a-generation’ opportunities (even if you’re new)

In Q3, Coinbase had 8.5 million monthly transaction users. It earned $366 million in transaction revenue and $211 million in subscription and service revenue.

Given the decline in cryptocurrencies, it’s no surprise that Coinbase shares have also seen a lot of volatility – falling a painful 82% in 2022.

But the company remains in Wood’s portfolio. Ark Invest’s flagship fund Ark Innovation ETF (ARKK) holds more than 5.9 million shares of Coinbase, worth approximately $257.1 million.

Block (SQ)

Wood’s Ark Innovation ETF also owns 6.26 million shares of Block, a digital payments technology formerly known as Square.

With a stake of $392.7 million, Block is currently the fifth largest holding in ARKK.

Management changed the name last December because “Square” had become synonymous with the company’s selling business. But the move did little to cheer investors. In 2022, the shares have fallen by more than 60 per cent.

Although the company is far from a favorite in the market right now, it continues to deliver some very impressive numbers.

In Q3, total net revenue increased 17% year-over-year to $4.52 billion. Gross profit reached $1.57 billion, up 38% from a year ago.

The company is also a cryptocurrency play: In the quarter, Block generated $1.76 billion in bitcoin revenue and earned $37 million in bitcoin gross profit.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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