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Grayscale Bitcoin Trust (GBTC)

With the rise of bitcoin over the last 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 its bitcoin holdings, less fees and expenses. The fund says that it hasn’t met this objective because its shares have traded at a premium or discount to that value which “at times has been substantial.”

Year to date, GBTC shares have fallen 75%.

The bankruptcy of cryptocurrency exchange FTX has sent shock waves across the crypto space and that’s one of the reasons why investors have been offloading GBTC shares. As a result, GTBC trades at a steep discount to its underlying asset — bitcoin.

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

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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, these transaction fees quickly added up.

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

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

Given the downturn in cryptocurrencies, it’s no surprise that Coinbase shares have also experienced heavy volatility — they are down 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 technologist formerly known as Square.

With the stake valued at $392.7 million, Block is currently the fifth largest holding at ARKK.

Management changed the name last December because “Square” had become synonymous with the company’s seller business. But the move did little to cheer up investors. In 2022, shares have tumbled more than 60%.

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

In Q3, total net revenue rose 17% year over year to $4.52 billion. Gross profit came in at $1.57 billion, up 38% from a year ago.

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

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About the Author

Jing Pan

Jing Pan

Investment Reporter

Jing is an investment reporter for MoneyWise. He is an avid advocate of investing for passive income. Despite the ups and downs he’s been through with the markets, Jing believes that you can generate a steadily increasing income stream by investing in high quality companies.

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