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Why Co-Founder Disagrees With Cathie Wood’s ‘Valuations’

2 mins
Updated by Kyle Baird
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In Brief

  • Ark Invest CEO Cathie Wood compared the valuations of and Coinbase in an interview.
  • She argued that 'Coinbase is a far better, well-diversified and better-managed company.'
  • Ark has major exposure to Coinbase, a company that has underperformed in the past year.
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In an interview with CNBC, Ark Invest CEO Cathie Wood compared the valuations of and Coinbase.

Wood had remarked, “If you look at the others like, its valuation over the past year has tripled while Coinbase in our portfolios is down 40%. That makes no sense,”

Further arguing that ‘Coinbase is a far better, well-diversified and better-managed company,’ her comments seemed to have irked co-founder and vice-chairman Nicolas Cary. In a retort, Cary stated, “I think the market is pretty clear — her position is down 50% and ours is up 3 X so…”

Coinbase valuations continue to slide

Through most of 2021, Ark Invest had increased its exposure to Coinbase. With respect to weight rankings, Coinbase is third on Ark’s holdings at around 4.6%. However, Coinbase’s valuations have almost been slashed by half in the past year.

Source: Nasdaq

Supporting Ark’s underperformance, Wood recently explained in a recent Yahoo Finance interview, “We have a five-year investment time horizon. So if you look at the last five years…we have outperformed the NASDAQ, S&P.”

Further arguing that the five-year time horizon is not just about looking back, but also about looking forward. And with that, she is betting that Bitcoin will hit a million dollars per coin somewhere between 2026 and 2030.

Wood bets on high Bitcoin prices

Bitcoin prices dropped close to 11% in the past week, sliding below $40,000 on April 11 before making a slight recovery to rise above $41,200 at the time of press.

Wood also predicted in the interview that by the time Bitcoin hits a million dollars, institutional investors will have a two and a half percent exposure to Bitcoin. She remarked, “I think they will regret not having more.”

When it comes to cashflows, the near-term picture hasn’t been pretty. CoinShares found that the digital asset market lost $134 million in profit-taking in the week ending April 8, of which, Bitcoin made up a massive $132 million of the total investment outflow.

Meanwhile, Wood also has comments about the private and public markets. She told CNBC that “the reasons the public markets aren’t efficient is that they are not doing the research.”

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Shraddha Sharma
Shraddha is an India-based journalist who worked in business and financial news before diving into the crypto space. As an investment enthusiast, she has also has a keen interest in understanding crypto from a personal finance standpoint.