[ad_1]
Yahoo Finance’s Myles Udland and Brian Sozzi explain Bitcoin’s decline and ARK ETF’s protracted slowdown as stock futures fall ahead of Fed Chairman Jerome Powell’s testimony to Congress.
Video transcript
MYLES ABROAD: The great story of yesterday’s market is what is happening with Cathie Woods ARK Invest. They have a suite of ETFs, five ETFs traded with various, ARKK is the main fund, but they also have ARKW, ARKF, ARKG and ARKQ. All of these funds lose around 3 and 1/2% in yesterday’s trading session. There is a Bitcoin position in the ARK wallet. They also have a lot of big names in tech that have been such big winners.
And Cathie Wood’s story of success over the past two years, destroying the market on the basis of returns, seeing the AUM go from around $ 3 billion to around $ 60 billion in just a few years. Just a major player in the market, Brian Sozzi. But I think it’s just interesting to see the action from yesterday. And we’ll see how there are a number of these ARK names that people are now associating with these funds. Obtain specific pressure. And I think that’s perhaps the most, clearest reason to say what hurt tech stocks yesterday.
BRIAN SOZZI: Yeah, Myles, let me pick up on that, ARK, because I’m looking at a chart from Jefferies right now, and they noted last week that the six ARK ETFs they are tracking brought in $ 2.5 billion. . And those six ETFs that Jefferies has tracked since the start of the year before this rout, they’ve seen inflows of $ 17 billion a year to date. So ARK Invest, Cathie Wood, we’ve covered it extensively, really before anyone knew who she was, really got a lot of attention on Wall Street with individual investors for her performance mostly around Tesla and a lot of those investments. new generation. .
But Myles, on sale today, is really interesting. And you have, I think, the establishment that is now coming here and trying to burst the Bitcoin bubble. And of course I know Elon Musk came out this weekend. He said, quote, “Bitcoin prices seem too high.” But you brought Janet Yellen out yesterday at an event, which called into question the effectiveness of using Bitcoin. Bill Gates questions the very existence of Bitcoin. Not surprising.
But again, these are the types of comments when you have a lot of dynamic trading and you have a dynamic type investment like a Bitcoin, these are the types of comments that might actually burst the bubble. And that’s what we’re seeing I’m thinking here this morning. And it’s not just Tesla Under Pressure or Bitcoin Under Pressure, it’s a lot of those other games. Nvidia under pressure. Their technology is getting used to Bitcoin mining. MicroStrategy under pressure. Myles, what does their new increase in convertible debt look like given the current rout? It sounds absolutely absurd.
MYLES ABROAD: Yeah, and I think that’s interesting, Sozzi, because we’re talking about Bitcoin at $ 48,000. Bitcoin just broke $ 40,000 a month ago. We arrived in 2020, 2021, not 2020 anymore. We arrived in 2021 with Bitcoin closer to $ 20,000. We surpassed these record levels from 2017, that was the big event. So we saw the price move significantly in just a few weeks.
And as we’ve discussed many times, the story with Bitcoin is the price. I know Bill Gates can say anything and Janet Yellen can say anything and no one in the coins community likes those comments very much. And I don’t blame them, because the story with all of these assets is that the price goes up a lot. And that brings more interest to the space. This creates situations like what is happening at MicroStrategy. It prompts someone like Elon Musk to invest a billion and a half dollars in Bitcoin. And the interest is driven by the price of a Bitcoin.
Obviously at $ 48,700 there are a lot of people out there who have made a ton of money, and they don’t really care if it’s 10% today. And they’re not going to worry about $ 15,000 more if even then they care about worrying about their assets. And so I think it’s an interesting situation, Soz, when you compare it to say that Apple goes down 10% in one day. Everyone was panicking. There must be a reason this is happening. It’s harder with the establishment to talk about Bitcoin because there doesn’t necessarily have to be a reason for it to go up or down as much as it tends to. And that creates a very strange asset to discuss.
BRIAN SOZZI: No, you’re right, Myles. And I want to leave people with maybe some positive news this morning, because in reality they’re seeing a route in NASDAQ stocks. You’ve seen the market under pressure, I would say for seven straight days. This is happening at an Evercore ISI this morning. Dennis Debusschere notes, quotes, “Market insiders are consistent with our view that the market yield bias deteriorates as real rates rise, but the average stock will be fine and cyclicals lead.”
He notes that the S&P 500, yes, on a multi-day losing streak, but cyclics have outperformed defenses by 3.2% in the past five days. So while you see this pressure focused on NASDAQ and Bitcoin and some of these hot financial assets, at least for now, you might not see anything that suggests a bigger sell off or correction could be coming soon. in the cards.
MYLES ABROAD: Yes, and it comes down to a theme that I know we’ll be discussing as we go through the rest of this year, which is really, can the economy and a lot of market share. can do very well even if the S&P and the tech stocks, those high-flying names, are under pressure? I think the old thing is what is bad for FANG names is probably good for you and me, hoping to get back to real life. Such interesting comments, Dennis, and we’ll see how this theme plays out for the rest of the year.
[ad_2]
Source link