S&P 500   5,088.80
DOW   39,131.53
QQQ   436.78
Dell Technologies breaks out ahead of earnings release
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
Dropbox’s stock is a falling knife worth catching
Novavax’s dispute resolution and upcoming earnings call
Unique BioPharma Opportunity for Accredited Investors (Ad)
Stock ideas from the 2024 Microcap Conference
Warner Bros. Discover: Debt down, profits up, yet questions remain
Unique BioPharma Opportunity for Accredited Investors (Ad)
Gloom settles over Germany's economy, with businesses downbeat about the coming months
Sprouts, Block rise; Booking Holdings, Insulet fall, Friday, 2/23/2024
S&P 500   5,088.80
DOW   39,131.53
QQQ   436.78
Dell Technologies breaks out ahead of earnings release
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
Dropbox’s stock is a falling knife worth catching
Novavax’s dispute resolution and upcoming earnings call
Unique BioPharma Opportunity for Accredited Investors (Ad)
Stock ideas from the 2024 Microcap Conference
Warner Bros. Discover: Debt down, profits up, yet questions remain
Unique BioPharma Opportunity for Accredited Investors (Ad)
Gloom settles over Germany's economy, with businesses downbeat about the coming months
Sprouts, Block rise; Booking Holdings, Insulet fall, Friday, 2/23/2024
S&P 500   5,088.80
DOW   39,131.53
QQQ   436.78
Dell Technologies breaks out ahead of earnings release
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
Dropbox’s stock is a falling knife worth catching
Novavax’s dispute resolution and upcoming earnings call
Unique BioPharma Opportunity for Accredited Investors (Ad)
Stock ideas from the 2024 Microcap Conference
Warner Bros. Discover: Debt down, profits up, yet questions remain
Unique BioPharma Opportunity for Accredited Investors (Ad)
Gloom settles over Germany's economy, with businesses downbeat about the coming months
Sprouts, Block rise; Booking Holdings, Insulet fall, Friday, 2/23/2024
S&P 500   5,088.80
DOW   39,131.53
QQQ   436.78
Dell Technologies breaks out ahead of earnings release
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
Dropbox’s stock is a falling knife worth catching
Novavax’s dispute resolution and upcoming earnings call
Unique BioPharma Opportunity for Accredited Investors (Ad)
Stock ideas from the 2024 Microcap Conference
Warner Bros. Discover: Debt down, profits up, yet questions remain
Unique BioPharma Opportunity for Accredited Investors (Ad)
Gloom settles over Germany's economy, with businesses downbeat about the coming months
Sprouts, Block rise; Booking Holdings, Insulet fall, Friday, 2/23/2024

Cathie Wood readies portfolio as Bitcoin ETF decision nears

Bitcoin ETF

Key Points

  • As Bitcoin rallies to a two-year high, ARK fund manager Cathie Wood adjusts portfolios ahead of a spot Bitcoin ETF decision.
  • Wood sees Bitcoin ETF approval as a "sell the news" event, but remains bullish on long-term prospects.
  • Another 2024 event that could push Bitcoin higher is halving, expected to occur in April. 
  • 5 stocks we like better than Coinbase Global

With Bitcoin rallying to its best levels in two years, ahead of the deadline for regulators to approve the first-ever Bitcoin spot exchange-traded fund, Ark fund manager Cathie Wood has been selling some crypto-related securities like Coinbase Global Inc. NASDAQ: COIN, while buying others, such as the ProShares Bitcoin Strategy ETF NYSEARCA: BITO.

It’s well known that Wood is a polarizing figure, especially as her actively managed ETFs, which focus on disruptive innovation in various sectors, underperform the broad market at times, but can also outperform by a wide margin. 

For example, the flagship ARK Innovation ETF NYSEARCA: ARKK returned about 70% in 2023, rebounding from its 2022 decline of 66.97%.

Meanwhile, larger, more established technology stocks, tracked by the Technology Select Sector SPDR Fund NYSEARCA: XLK were up 64.67% in 2023. S&P tech stocks were down 18.17% in 2022. 

Let’s look at Wood’s recent Coinbase trades, framed within the stock’s overall performance. The ARKK ETC and the ARK Next Generation Internet ETF NYSEARCA: ARKW have been selling off Coinbase since October. 

Coinbase rallied with broad market in Q4

The Coinbase chart shows the stock posting substantial rallies along with the broad market in the fourth quarter, although it was down slightly the week ending December 29, as the Financial Select Sector SPDR Fund NYSEARCA: XLF advanced. 


Coinbase is not tracked within the S&P 500, but it has a market capitalization of $39.33 billion, so the large-cap index is an appropriate benchmark.

Meanwhile, on December 27, the ARKW ETF bought more than 4.32 million shares of the BITO ETF, for a market value of over $90 million. 

Investors believe regulators will OK a spot Bitcoin ETF in January, but are split as to the effect on Bitcoin itself. 

Spot Bitcoin ETF: Buying like never before?

One scenario is that the floodgates open, and institutional traders start buying up Bitcoin like never before. 

Another scenario is that the approval is already baked into Bitcoin’s price. The digital currency currency rose 61.72% in the past three months, with that rally accelerating in mid-October as optimism about a spot ETF grew.

That could mean some profit-taking on news of an ETF approval. Investors may see cryptocurrency stocks, as well, trade lower at the same time. 

In fact, that’s precisely Wood’s philosophy. In a December interview with Yahoo Finance, Wood said she views a spot Bitcoin ETF approval as a “sell the news” event. However, she added that her long-term view was more bullish.

Outperforming Nasdaq 100

There’s no question that Bitcoin has outperformed growth equities. On a 10-year basis, the Invesco QQQ NASDAQ: QQQ has returned a not-so-shabby 365.58%, but that’s dwarfed by Bitcoin’s return of 5,185.30%. 

On a one-year basis, the QQQ ETF, which tracks the Nasdaq 100, is up 51.69%, while Bitcoin returned 168.98%. 

The odds of a spot Bitcoin ETF have been growing since August, when a federal court issued a ruling favorable toward Grayscale Investments. The asset manager said the Securities and Exchange Commission acted arbitrarily in nixing Grayscale’s plan to convert the Grayscale Bitcoin Trust OTCMKTS: GBTC into an ETF.

U.S. regulators have already given the nod to ETFs tracking Bitcoin futures. For example, the BITO ETF launched in October 2021. It had a rough first couple of years, along with the underlying digital asset, but rebounded in 2023.

Spot ETF invests in underlying digital currency

However, a spot Bitcoin ETF would invest directly in the digital currency itself. Retail investors without a great deal of knowledge about Bitcoin would likely be interested in an ETF, rather than attempting to invest directly themselves. The same would be true for institutions and asset managers with a focus on stocks, bonds and commodities. 

Another 2024 event with the potential to send Bitcoin higher is halving. That’s an expected occurrence every four years or so, designed to limit Bitcoin’s supply and mitigate price inflation. It occurs once an additional 210,000 blocks are mined. The intention is to imitate the scarcity of precious metals in the real world.

Halving refers to the rewards Bitcoin miners receive as incentives for validating transactions and adding them to the blockchain. Halving, as the name implies, reduces those rewards. 

The next halving should happen sometime in April 2024. Bitcoin halving reduces new supply, which in turn increases scarcity. Historically, Bitcoin halving results in upward price movements due to greater demand. 

→ This is the #1 Stock to Buy for the AI Tidal Wave (From Chaikin Analytics) (Ad)

Should you invest $1,000 in Coinbase Global right now?

Before you consider Coinbase Global, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Coinbase Global wasn't on the list.

While Coinbase Global currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

The 10 Best AI Stocks to Own in 2024 Cover

Wondering where to start (or end) with AI stocks? These 10 simple stocks can help investors build long-term wealth as artificial intelligence continues to grow into the future.

Get This Free Report

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Coinbase Global (COIN)
1.0535 of 5 stars
$165.98-2.9%N/A614.74Hold$128.19
ARK Innovation ETF (ARKK)N/A$48.41-0.1%N/AN/AN/AN/A
Financial Select Sector SPDR Fund (XLF)N/A$40.30+0.5%1.74%12.16N/AN/A
Invesco QQQ (QQQ)N/A$436.78-0.3%0.53%N/AN/AN/A
ProShares Bitcoin Strategy ETF (BITO)N/A$24.17-1.7%N/AN/AN/AN/A
ARK Next Generation Internation ETF (ARKW)N/A$74.97+0.8%N/AN/AN/AN/A
Technology Select Sector SPDR Fund (XLK)N/A$205.28-0.2%0.63%20.04HoldN/A
Compare These Stocks  Add These Stocks to My Watchlist 

Kate Stalter

About Kate Stalter

  • stalterkate@gmail.com

Contributing Author

Retirement, Asset Allocation, and Tax Strategies

Experience

Kate Stalter has been a contributing writer for MarketBeat since 2021.

Additional Experience

Series 65-licensed investment advisor, financial advisor, Blue Marlin Advisors; investment columnist for Forbes, U.S. News & World Report

Areas of Expertise

Asset allocation, technical and fundamental analysis, retirement strategies, income generation, risk management, sector and industry analysis

Education

Bachelor of Arts, Saint Mary’s College, Notre Dame, Indiana; Master of Business Adminstration, Kellogg School of Management at Northwestern University

Past Experience

Founder, financial advisor for Better Money Decisions; editor, stock trading instructor for Investor’s Business Daily; columnist, podcast host, video host for MoneyShow.com; contributor for Morningstar magazine


Featured Articles and Offers

Search Headlines: