[Business & Issue] "Money Tree Sister" Cathie Wood, Devoted to Bitcoin... Why Her Company Is Named 'Ark'

Cathie Wood's Confidence in Bitcoin Drives ETF Rebound
Ark Invest Founded After "Divine Revelation"
Emphasizing 'Disruptive Innovation'... Caution Needed on Volatility

The ARK Innovation ETF (ARKK), led by Ark Invest CEO Cathie Wood-widely known among Korean investors as the “Money Tree Sister”-has recently rebounded in stock price and is drawing renewed attention. This surge in expectations is attributed to CEO Wood’s strong confidence in Bitcoin and her renewed aggressive investments in artificial intelligence (AI)-related tech stocks. However, experts caution that while her investment principle of “disruptive innovation” has at times delivered high returns, it has also been marked by significant volatility year after year, warranting a cautious approach.

Cathie Wood Reignites the Bitcoin Bull Case... ETF Price Rebounds

On the Nasdaq in the United States, ARKK’s share price closed at $86.92 on October 1 (local time), up 52.78% from the beginning of the year. Compared to its yearly low of $40.51 on April 8, the price has more than doubled. ARKK is the flagship investment fund of Ark Invest, led by CEO Wood, and is heavily weighted toward technology stocks and cryptocurrencies, including Tesla, Coinbase, and Palantir.

Investor optimism for ARKK has grown further as CEO Wood has signaled even more aggressive investments in cryptocurrencies, demonstrating her confidence in Bitcoin. Appearing recently on a cryptocurrency-focused podcast, she emphasized, “Bitcoin is a rules-based currency system with a limited supply and will continue to be the largest presence among cryptocurrencies,” adding, “Our mutual funds include both Bitcoin and Ethereum as investment assets.”

Investor sentiment has also been buoyed by Ark Invest’s resumption of investments in Alibaba, the Chinese tech giant. According to Bloomberg, Ark Investment disclosed in documents submitted to the U.S. Securities and Exchange Commission (SEC) at the end of last month that it had purchased $16.3 million (about 2.28 billion KRW) worth of Alibaba American Depositary Receipts (ADRs). This marks Ark Invest’s first investment in a Chinese big tech company in four years, since 2021.

Bloomberg noted, “This purchase by Ark Investment comes amid a recent rally in Alibaba’s share price and signals a resumption of tech stock investments that had been virtually halted following the collapse of Chinese internet company stocks in 2021 and 2022.”

"Founded After Divine Revelation"... Company Named 'Ark' for a Reason

Arc Invest Homepage

Now recognized as a major player in cryptocurrency and tech stock investments, Ark Invest was established in 2014 when CEO Cathie Wood abruptly left AllianceBernstein to found her own investment firm. She emphasized the importance of a more aggressive “disruptive innovation” investment approach than traditional asset managers, and focused Ark Invest’s strategy on new technology sectors such as cryptocurrency and AI-which were relatively unfamiliar in the 2010s.

According to The New York Times, CEO Wood decided to launch the company in the summer of 2014 after what she described as a sudden divine revelation. As a devout Christian, she personally named the company “Ark,” referring to the vessel from the Old Testament. In addition to its flagship ARKK fund, Ark Invest manages more than 10 other funds and, as of the first half of this year, is reported to oversee $13.6 billion (about 19 trillion KRW) in assets under management.

Cathie Wood’s rise to fame began in earnest in 2020, during the height of the COVID-19 pandemic. ARKK posted an impressive annual return of 152% that year, propelling her “disruptive innovation” investment strategy into the spotlight. At that time, ARKK generated significant profits by focusing on Tesla, the leading electric vehicle stock, as well as Zoom, the video conferencing platform that gained popularity during the pandemic, and Roku, the TV streaming platform. Her funds subsequently became a major topic on social media, especially among young investors in the United States.

Emphasizing Disruptive Innovation... But Beware of Volatility

Reuters Yonhap News

Experts advise that Ark Invest’s so-called disruptive innovation investment strategy should be approached with caution, as it is associated with significant swings in returns. This is because Ark Invest’s main assets-cryptocurrencies and major U.S. tech stocks-are all highly volatile, meaning there is a substantial risk of losses.

According to fund analysis firm Morningstar, ARKK’s returns over the past 10 years have been extremely volatile. After posting a 152% return in 2020, ARKK suffered losses of -24% in 2021 and -67% in 2022. The fund then rebounded with a 67% return in 2023, but achieved only 8.4% last year.

As a result, Ark Invest’s assets under management peaked at $53.7 billion (about 75 trillion KRW) in June 2021 but have steadily declined since. By March 2022, assets had been halved to $23.9 billion, and continued to decrease, reaching just $10.1 billion as of January this year.

Amy Arnott, an analyst at Morningstar, pointed out, “Ark Invest’s funds have experienced asset losses even during bull markets,” adding, “It’s important to pay attention not just to high returns, but also to their risk management capabilities.”