Ark Investment Management founder and CEO Cathie Wood explained why her company's flagship fund has maintained a strong allocation in cryptocurrency exchange Coinbase Global Inc (NASDAQ:COIN), in an interview with CNBC’s Squawk Box.
What Happened:, Wood acknowledged that cryptocurrency is in a “massive slump right now,” but said Coinbase is in the fund’s top ten holdings because Ark believes that the "crypto revolution" is still underway.
Wood's hedge fund Ark Invest owns 8.16 million shares in Coinbase via three of its exchange-traded funds, estimated to be worth $412.85 million as of Wednesday.
See Also: Coinbase Plunges After Downgrade, But Here's Why The Progression Higher Remains In Play
“We do believe that the three revolutions around crypto are underway and they will not be stopped,” she said.
Wood named the first revolution to be “the money revolution,” referring to Bitcoin (CRYPTO: BTC) — the first digital, private, rules-based monetary system.
The Ark founder described the second and third cryptocurrency revolutions as decentralized finance (DeFi) and non fungible tokens (NFTs).
According to Wood, DeFi really came of age in 2020 and 2021. She said that while the reach for yield and the leverage in some protocols went “way too far,” Ark was impressed with how robust the ecosystem has been. In her view, the Ethereum (CRYPTO: ETH) blockchain, upon which the majority of DeFi is built, has held up well amid the cascading effects of Terra’s (CRYPTO: LUNC) downfall.
With regards to NFTs, Wood said that digital property rights which NFTs represent are “going to become incredibly important."
Price Action: According to data from Benzinga Pro, BTC was trading at $20,338 at press time, down 1.45% over the last 24 hours. Coinbase shares closed 8.54% lower on Tuesday.
Photo courtesy: Ark Invest
