Ark Invest enters the market against the trend! Cathie Wood aggressively buys the dip in concept stocks worth 39.6 million

Cathie Wood’s Ark Invest management company, during a broad decline in the cryptocurrency market, made a contrarian move on November 19 by adding to three Bitcoin-related stocks, totaling an investment of $39.6 million. This large-scale purchase exemplifies Ark’s consistent strategy: buying the dip when stock prices appear depressed.

Ark Invest deploys three strategic buys totaling $39.6 million to bottom fish

(Source: Google)

On November 19, Ark also purchased 260,651 shares of Ethereum asset treasury company Bitmine Immersion Technologies (BMNR), valued at approximately $7.6 million, at the close of trading. On November 21, BMNR stock fell over 10%, closing at $26.02. As an Ethereum asset treasury, Bitmine’s business model is similar to Strategy Inc.’s approach to Bitcoin—involving holding large amounts of Ethereum as strategic reserves and increasing holdings through various means. When Ethereum’s price drops, Bitmine’s book value declines, putting additional pressure on its stock price. Ark’s purchase as BMNR’s stock plunged 9.5% signals extreme confidence in Ethereum’s long-term value.

Ark also increased its stake in cryptocurrency exchange Bullish (BLSH-US) by 463,598 shares, worth about $16.9 million. On that day, Bullish’s stock declined 3.63%, closing at $36.39. As the parent company of CoinDesk, Bullish holds a unique position within the crypto industry. As a crypto exchange, its performance is directly influenced by Bitcoin prices and trading volumes. When Bitcoin crashes, trading volume can spike temporarily due to volatility, but in the long run, bearish market sentiment tends to reduce user activity and trading frequency. Ark’s significant purchase during a 3.63% decline in Bullish’s stock indicates strong confidence in the long-term prospects of crypto exchange business.

Next, Ark acquired 216,019 shares of Circle Internet Group (CRCL-US), a stablecoin issuer, valued at around $15.1 million. On that day, Circle’s stock fell about 9%, closing at $69.72. Circle is the issuer of USDC, the second-largest stablecoin after USDT. Stablecoin business features relatively stable revenue streams; Circle earns interest income by holding U.S. Treasury bonds and cash reserves backing USDC. During market volatility, investors often convert volatile assets like Bitcoin into stablecoins for hedging, which can actually increase USDC circulation. Ark’s purchase during a 9% decline suggests confidence in Circle’s stable business model and its core role in crypto infrastructure.

Details of Ark’s three bottom-fishing trades

Bullish: Buy 463,598 shares, valued at $16.9 million, down 3.63% that day

Circle (CRCL stock): Buy 216,019 shares, valued at $15.1 million, down 9%

Bitmine (BMNR stock): Buy 260,651 shares, valued at $7.6 million, down 9.5%

Total Investment: $39.6 million, with an average purchase price decline of approximately 7.4%

In fact, Ark has been actively accumulating crypto-related stocks recently, having bought $10.2 million worth of BitMine shares just on Monday. This continuous buying indicates Ark’s approach is not short-term speculation but rather building a systematic crypto exposure. From $10.2 million on Monday to $39.6 million by Wednesday, Ark invested nearly $50 million into crypto concepts in just three days.

Cathie Wood’s dip-buying philosophy and historical track record

This large-scale buy demonstrates Ark’s consistent strategy: buying the dip when stocks look undervalued. Ark typically employs such tactics to maximize value from long-term favored stocks or to rebalance its ETF holdings within target parameters. Cathie Wood, known as “Wood Sister,” is famous for her bold disruptive investments and dip-buying approach.

Ark’s investment philosophy is based on the “Innovation Cycle” theory. Wood believes that true disruptive innovation is often underestimated early on, experiencing volatile swings before delivering exponential returns. This philosophy explains Ark’s continued purchases before Tesla’s 2020 surge and aggressive allocation to crypto concepts ahead of Bitcoin’s 2021 bull run. However, this strategy also led to significant losses after 2021, when tech stocks and crypto entered bear markets, causing Ark’s flagship ETF ARKK to plummet over 70% from its peak.

Despite setbacks in 2022-2023, Wood has never changed her buy-the-dip approach. Her logic is: if you believe in the long-term disruptive potential of a technology or asset, short-term declines are just better entry points. The recent large-scale purchases during Bitcoin’s fall below $86,000 and widespread declines in crypto stocks are a practical application of this philosophy.

Ark invests these crypto-related stocks across its three major ETFs: Innovation ETF (ARKK-US), Next Generation Internet ETF (ARKW-US), and Fintech Innovation ETF (ARKF-US). This diversified allocation reduces the exposure of any single ETF to crypto market volatility while allowing all investors interested in innovation and disruptive tech to participate in the crypto narrative.

Strategic value of Bitcoin-related stocks and Ark’s stock-picking logic

The three selected companies each represent different segments of the crypto industry chain. Bullish, as a crypto exchange, is a direct gateway to crypto trading, reflecting market activity. Circle, as a stablecoin issuer, is a core part of crypto financial infrastructure; USDC is widely used in DeFi and cross-border payments. Bitmine, as an Ethereum asset treasury, signifies institutional strategic holdings in Ethereum.

This stock selection reflects Ark’s strategy to build a diversified crypto exposure. Exchanges, stablecoins, and asset-holding companies cover the trading, payments, and asset layers of the crypto industry. As the market recovers, all three segments stand to benefit. Moreover, all three are publicly listed companies under U.S. regulation, offering higher compliance and transparency, reducing regulatory risks.

From a valuation perspective, the price drops on that day made these stocks more attractive. Bullish down 3.63%, Circle down 9%, and Bitmine down 9.5% created valuation discounts in the short term. If Ark’s judgment is correct, and the crypto market rebounds over the coming months or years, these stocks bought at lows could generate substantial returns.

In terms of risk management, Ark’s choice to buy stocks rather than directly acquiring Bitcoin or Ethereum may be due to several considerations: First, these stocks are within the scope of its main ETFs, complying with SEC regulations; second, listed stocks provide additional disclosure and governance, reducing investment risks; third, stock investments avoid custody and security issues associated with directly holding cryptocurrencies.

Value investing logic amid Bitcoin’s plunge

This buy occurred amid Bitcoin’s first drop below $86,000 since April. From the October high of $125,100 to $86,000, Bitcoin fell about 31% within six weeks. While many investors see this as a disaster, value investors might view it as an opportunity. Ark’s purchases send a clear message: they believe current prices are attractive relative to the long-term value of the crypto industry.

Cathie Wood’s contrarian moves have had successes and failures historically. Successful examples include continuously buying Tesla when it was widely doubted, ultimately generating multiple returns. Failures include buying large amounts of tech stocks at highs in 2021, which then suffered heavy losses. Whether this time’s Bitcoin dip and crypto stock purchases will pay off remains to be seen over the coming years.

For ordinary investors, Ark’s large-scale buying offers an important signal. While not to be blindly followed, the fact that a long-term track record professional institution is contrarily buying during market panic is worth noting. With a professional research team and industry resources, Ark’s decisions are usually based on in-depth fundamental analysis. The $39.6 million investment is a significant decision, likely involving rigorous internal review and risk assessment.

However, investors should also recognize that Ark’s strategy is not risk-free. Its high concentration in disruptive tech and growth stocks means market rallies can yield extraordinary gains, but downturns can be severe. Following Ark requires the same risk appetite and time horizon; otherwise, short-term volatility could force premature exits.