Cathie Wood makes two moves! Ark Invest spends $12.63 million to buy Bullish stocks

Cathie Wood’s Ark Invest bought 57,164 shares of Bullish on Monday, valued at approximately $1.83 million. The female stock star previously purchased 393,057 shares last Friday, worth about $10.8 million, and on the same day sold $22 million worth of Coinbase stock.

Ark’s Two-Day Accumulation of $12.63 Million in Bullish Stock Picking Logic

On Monday, as the overall stock market rose, the price of Bullish also increased, leading Ark Invest, led by Cathie Wood, to increase its holdings of Bullish shares. According to the company’s trading disclosures, it bought a total of 57,164 shares of Bullish through its three exchange-traded funds, worth about $1.83 million at closing prices.

Previously, last Friday, Ark purchased 393,057 shares of Bullish, valued at around $10.8 million. That same day, Ark also sold approximately $22.2 million worth of Coinbase stock. This simultaneous “buy Bullish, sell Coinbase” operation has attracted significant market attention regarding Cathie Wood’s stock-picking logic. Over the two days, Ark bought about $12.63 million worth of Bullish, which has become a substantial position in its portfolio.

Cathie Wood, known as the “female stock goddess” and “tech female stock goddess,” is famous for her bets on disruptive innovation. Her successful investments in Tesla, Zoom, Coinbase, and other stocks have made her a market trendsetter among retail investors. Every trade by Ark is closely watched and often mimicked. When she makes large purchases of Bullish, many investors interpret it as “Cathie Wood favors Bullish over Coinbase.”

What is Bullish? It is a cryptocurrency exchange headquartered in Gibraltar, supported by blockchain company Block.one, and went public in 2021 via a SPAC (Special Purpose Acquisition Company). Bullish features an automated market maker (AMM) mechanism and claims to offer better liquidity and prices than traditional exchanges. However, its trading volume has been consistently low, far behind major exchanges like Coinbase.

Possible Reasons for Ark Buying Bullish and Selling Coinbase

Valuation Gap: Bullish’s stock price is lower, potentially offering greater rebound potential

Technological Approach: Bullish’s AMM mechanism may be viewed as innovative by Cathie

Portfolio Rebalancing: Reducing exposure to the rallying Coinbase, increasing holdings in lagging Bullish

Risk Hedging: Diversifying across multiple crypto stocks rather than concentrating on a single asset

However, this strategy also carries risks. Coinbase, as the largest compliant U.S. exchange, has advantages in brand, liquidity, and regulation. Although Bullish is cheaper, its trading volume and user base are far smaller than Coinbase. If the crypto market rebounds, Coinbase could see larger gains. Is Cathie Wood’s move a precise low-buy, high-sell strategy, or a misjudgment of relative value? Time will tell.

Catalyst for Bullish’s 16.76% Surge

On Monday, amid stock market gains, Ark’s latest purchase of Bullish was observed. According to The Block’s price page, Bullish’s stock closed up 16.76% at $32.05; Coinbase rose 1.29% to $167.25. Other major crypto-related stocks also gained, with Circle up 5.36% and Bitmine up 4.79%.

Bullish’s 16.76% single-day increase is highly notable among crypto stocks, far exceeding Coinbase’s 1.29%. Several factors may explain this outperformance. First, technical rebound: Bullish’s stock has been depressed for a long time, accumulating oversold momentum, which could lead to a stronger bounce once market sentiment improves. Second, lower liquidity: Bullish’s trading volume is much smaller than Coinbase’s, so similar buy orders can push the price more significantly. Third, Ark’s buying activity itself: when the market sees the “female stock goddess” making large purchases for two consecutive days, follow-on buying tends to push prices higher.

The rise in other crypto stocks (Circle +5.36%, Bitmine +4.79%) indicates a broad crypto stock rebound on Monday. The Dow Jones Industrial Average rose 0.04% to a new high, Nasdaq gained 0.9%, and the S&P 500 increased 0.47%. This overall bullish stock market environment provides a macro backdrop for crypto stocks to rise.

However, Bitcoin and spot crypto markets are decoupled from stocks. According to The Block’s BTC price page, as of 10:10 PM Eastern Time Monday, Bitcoin was down 1.36% in 24 hours at $69,786, with intraday trading between $68,500 and $71,000. Ethereum rose slightly by 0.7% to $2,097.

This divergence—crypto stocks rising while spot crypto declines—merits reflection. It may reflect differing risk preferences among investor groups. Traditional stock investors holding crypto stocks participate indirectly in the crypto market, with different risk tolerance and investment logic than direct holders. When stocks are generally rising, they are willing to buy crypto-related stocks; but native crypto investors, observing technical issues like Bitcoin falling below $70,000, may continue to sell.

Cathie Wood’s Track Record and Controversies

Cathie Wood and her Ark Invest are highly controversial in the investment world. Supporters see her as a prophet of disruptive innovation, having made big bets early on Tesla (bought when stock was around $200, before split and run-up to $1,200), and heavily allocated to Coinbase at IPO. Her bets on AI, gene editing, cryptocurrencies, and other frontier tech reflect a strong belief in the future.

Critics point out that her portfolio suffered severe declines in 2021-2022. Ark Innovation ETF (ARKK) plummeted over 70% from its 2021 high, with many star holdings like Zoom, Teladoc, Roku halved or worse. Her extreme optimism on Tesla (target price once at $3,000) and misjudgment of inflation led to ridicule in 2022.

Currently, Cathie Wood’s heavy position in Bullish and reduced holdings in Coinbase—whether a precise relative value play or a repeated misjudgment—remains to be seen. Although Bullish is cheap, its business model and competitive position are far inferior to Coinbase. If the crypto market rebounds, Coinbase, as the industry leader, could enjoy higher valuation multiples. Her recent move may prove wise or mistaken in the coming months.

For investors copying Cathie Wood, understanding her investment logic and risk profile is crucial. She is a long-term investor, with typical holding periods measured in years, capable of enduring significant short-term volatility. Managing billions of dollars across hundreds of stocks, a single failure is not fatal. But retail investors heavily concentrated in her picks may face risks they cannot withstand.