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Bitcoin was down around 18% over the past week on Tuesday afternoon. The time of dreams
The price of Bitcoin and crypto-related stocks fell over the past week as China cracked down on cryptocurrency mining and banking. But an exchange-traded fund with large holdings in the digital currency has made gains nonetheless.
The $ 5.8 billion ARK Next Generation Internet ETF (ticker: ARKW), managed by star fund manager Cathie Wood, is one of the ETFs with the most Bitcoin in its portfolio. This is not surprising given that Wood said digital currency will reach up to $ 500,000.
On Tuesday, the fund held a 3.6% weighting, or $ 207 million of shares, in the Grayscale Bitcoin Trust (GBTC), a closed-end fund holding Bitcoin on behalf of its shareholders. The ETF also held a 3.3% weighting, or $ 189 million of shares, in the Coinbase Global cryptocurrency exchange (COIN).
These holdings are a drag on the fund, given the heavy losses of Bitcoins. Early Tuesday, the cryptocurrency fell below $ 30,000 for the first time since January, although it fell back to around $ 32,500 afterwards, for a loss of around 18% over the week. last. Coinbase is down 4% over this period.
The next-generation Internet ETF ARK, however, rose 4.6% over the same period, with a gain of 1.7% on Tuesday alone. One positive factor is that the Grayscale fund, which was already trading below the Bitcoin price, didn’t drop as much as the cryptocurrency itself.
The KRG is funding significant holdings in other innovative Internet actions that have also limited the damage. Its second-largest attendance, Shopify (SHOP), for example, rose 14% last week. Other large holdings, such as Roku (ROKU), Twilio (TWLO) and Unity Software (U) gained 19%, 12% and 13% respectively.
All of these stocks struggled earlier this year as cyclical stocks gained favor and inflation worries soared, but they have been steadily rising again since mid-May.
Bitcoin has only grown 13% for the year and has lost more than half of its value since it hit its all-time high of $ 64,829 on the April day Coinbase went public. The ARK Next Generation Internet ETF is now slightly lower than it was at the start of the year. At its 2021 low in mid-May, the fund was down 16% year-to-date.
Write to Evie Liu at [email protected]
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