ARK's Bullish Bet: Crypto Exchange Gains as Defense Holdings Shrink

Cathie Wood's ARK Invest has significantly increased its stake in Bullish, the digital asset exchange that recently listed on the New York Stock Exchange, acquiring over $5 million worth of shares across multiple ETFs. The firm's ARK Innovation ETF (ARKK) purchased 72,537 shares, the ARK Next Generation Internet ETF (ARKW) added 21,354, and the ARK Fintech Innovation ETF (ARKF) acquired 11,122 shares, according to a Cointelegraph report. This follows a prior $8.27 million investment in mid-October, with ARK's total holdings in Bullish now exceeding $172 million since the exchange's $1.1 billion NYSE debut, the report added.

The moves coincide with Bullish's recent U.S. expansion, marked by a New York launch event where the firm secured both a BitLicense and money transmission license from New York regulators, enabling spot trading in 20 states. The exchange, backed by Block.one and led by CEO Tom Farley, has processed over $1.5 trillion in trades since its 2021 global launch and now ranks among the top 10 exchanges by Bitcoin and Ethereum volume, Cointelegraph noted. Shares in Bullish rose 1.24% to $50.57 on Friday, recovering from earlier volatility.

The heightened interest in Bullish is further underscored by Leverage Shares by Themes, which launched a 2X leveraged ETF targeting the stock, BLSG Leverage Shares 2X Long BLSH Daily ETF, alongside similar products for Bitmine Immersion Technologies (BMNR), Mp Materials Corp (MP), and Nebius Group (NBIS), according to a GlobeNewswire release. The new ETFs aim to provide amplified exposure to these companies, which are positioned at the forefront of digital assets, clean energy, and crypto infrastructure. Themes ETFs highlighted Bullish's role in bridging traditional finance and digital assets, calling it a "next-generation crypto marketplace," the release said.

ARK's investment strategy also includes strategic divestments. On October 31, the firm sold 41,892 shares of Palantir Technologies for $8.15 million and 42,865 shares of Kratos Defense for $3.78 million through ARKK, signaling a shift away from defense and tech sectors, according to an Investing.com report. Conversely, ARK added to its position in Bullish and Intellia Therapeutics, buying 38,846 shares of the gene-editing company for $476,640, the report noted. These trades reflect a broader reallocation toward high-growth opportunities in crypto and biotech, aligning with ARK's focus on disruptive innovation.

The market reaction to Bullish's U.S. launch has been cautiously optimistic. While the exchange's regulatory compliance and partnerships with BitGo and Nonco have bolstered credibility, challenges remain in scaling operations and competing with established crypto platforms. Analysts note that ARK's repeated investments could signal long-term confidence in Bullish's ability to capitalize on the evolving digital asset landscape, the Cointelegraph report observed.