- Ark Invest is moving funds from Coinbase and other stocks into treasury-backed crypto firms holding massive ETH reserves.
- Ethereum unstaking demand is rising as exit queues stay low, giving investors quicker access to their staked ETH holdings.
- Cathie Wood expects treasury-backed crypto firms to become the next big way for investors to gain exposure to bitcoin and ETH.
Ark Invest is reshaping its crypto investment strategy as Ethereum unstaking demand grows and opportunities emerge in treasury-backed crypto firms. Cathie Wood, Ark Invest’s founder and CEO, highlighted a new trend where venture capitalists and investors move staked ETH into digital asset treasury companies (DATs) to maximize returns. This comes as Robinhood offers a 2% match for crypto transfers.
Additionally, a chart shared by Brett Winton at Ark shows Ethereum exit queues remain minimal compared to entry wait times. The data, spanning from May 2021 to July 2022, shows that while staking once faced long entry delays, exit wait periods have been consistently low. This allows investors to unstake ETH with little friction, further fueling the surge in demand.
Ark Invest Restructures Holdings
Besides tracking staking trends, Ark Invest has been realigning its portfolio. On Thursday, Ark sold $12.1 million worth of Coinbase shares across its ARK Innovation ETF (ARKK) and ARK Next Generation Internet ETF (ARKW). The firm also trimmed positions in Block Inc., Robinhood Markets, and its own bitcoin ETF, ARKB.
However, Ark is not retreating from crypto exposure. Instead, it is reallocating capital. Earlier this week, Ark invested $116 million into Bitmine Immersion Technologies, a treasury company backed by Peter Thiel that holds more than $1 billion in ether. This move builds on $175 million already invested across Ark’s ETFs.
Treasury Firms Gain Investor Attention
The strategy highlights a shift in how institutional investors gain crypto exposure. Treasury-backed firms like Bitmine offer a way for advisors to give clients indirect access to Bitcoin and ether without direct custody. Consequently, such companies are becoming attractive as staking lockups end and liquidity flows back into the market.
Furthermore, Cathie Wood thinks that the trajectory of these treasury stocks may resemble that of publicly traded firms with substantial cryptocurrency reserves, such as MicroStrategy. Investors looking for stability and upside exposure may find new opportunities as a result of this structural change.
