Ark Invest’s Cathie Wood reveals profit of over $8 million from Bitcoin investment

While the recent crypto market crisis has produced a number of unhappy tales, this does not necessarily reflect those who regarded Bitcoin as an investment potential some years ago.

With Bitcoin’s current price hovering close around $20,000, some early adopters really achieved astronomical gains by capitalising on favourable circumstances.

Such is the case with Cathie Wood, the founder of Ark Invest and proclaimed “Queen of Wolf Street,” who declared on Tuesday that she had amassed over $7 million by purchasing Bitcoin at a price of $250 per unit.

A really prudent expenditure

The disclosure was made by Wood during an interview done by Peter McCormack for the podcast What Bitcoin Did.

There, the investor revealed that at the time she had allocated around USD $100,000 to purchase Bitcoin, a dangerous wager she opted to make based on the advice of economist Arthur Laffer.

Wood specifically requested that Laffer examine the digital money and provide her suggestions after doing the necessary investigation.

Laffer, who taught Wood at the University of Southern California, closed his investigation with the statement, 

“I’ve been searching for this since the gold standard.”

The economist acknowledged that Bitcoin was a rules-based monetary system, and in response to Wood’s concern about the potential size of the digital currency, Laffer inquired about the size of the US monetary base.

Wood stated that Bitcoin’s market value was around $6 billion at the time, while the US monetary base, or the total of all dollars in circulation and balances in reserve, was approximately $4.5 million.

Wood, Ark Invest, and Bitcoin

Cathie Wood is now rated as one of the most respected investors on the world’s primary financial exchanges. 

Ark Invest rose to prominence on the stock market in 2020 as a result of its prior investments in unsuccessful technological businesses, which created substantial profits and drew a substantial amount of cash to its exchange-traded funds.

Due to the nature of ETFs and the concept of only being allowed to invest in securities, Ark Invest was unable to invest in Bitcoin at its height. 

Instead, the company elected to investigate avenues similar to those provided by Grayscale Bitcoin Trust, therefore paving the way for all comers.

At a current price of around USD $20,600 per unit as at press time, it is anticipated that Wood capitalised profits of USD $8.2 million on the original investment of USD $100,000.

Currently, Ark Invest is one of the firms requesting permission from the US Securities and Exchange Commission (SEC) to develop its own Bitcoin-based ETF.

However, the regulator rejected the request presented in April of this year and postponed its decision on the plan, which is currently under consideration, in July.

Notably, Ark and many other applicants have had their plans for a Bitcoin exchange-traded fund (ETF) denied by the SEC, which cites worries about price volatility and probable market manipulation.

The Queen of Wolf Street

Last week, Tesla reported quarterly numbers that fell short of market expectations. According to Abhishek Vishnoi of Yahoo Finance, Cathie Wood, the founder of Ark Invest, capitalised on the resulting correction in value by purchasing further shares of the company.

According to Bloomberg statistics, Wood’s flagship fund, Ark Innovation ETF, purchased 66,190 shares of the business from Elon Musk, marking her firm’s second acquisition of the electric car manufacturer this month. 

The fund purchased a tranche on October 4 after Tesla announced a delivery problem.

This is the first time since the third quarter of 2021 that the business has failed to meet sales projections, according to statistics from Bloomberg.

Musk was pessimistic about the future for demand, citing China and European recessions and Federal Reserve rate rises.

Musk’s cautious prognosis eclipsed his epic year-end address to analysts and his goal of Tesla one day being worth more than the sum of Apple and Saudi Aramco.

Last Thursday in New York, shares of the electric car manufacturer declined 6.7%, bringing this year’s drop to 41%.

Tesla was the lone stock purchased on Thursday by Ark Invest Management LLC. In contrast, Ark Funds liquidated their investments in Nvidia, Crispr Therapeutics, and a few other gene-editing companies.

Ark Funds, the main ETF of Ark, has fallen 63% this year. The Federal Reserve’s unprecedented tightening has pushed major economies to the verge of recession, negatively impacting growth stocks.

Tesla finished at $207.28, leaving two identical candles following a bearish gap, and the 70-period and 200-period moving averages stay above the price.