Cryptocurrency is in the spotlight again, and much of that has to do with the crypto compromise amendment being barred from the $1 trillion infrastructure package before Congress.
While the compromise may have hurt Bitcoin on Monday, Tuesday brought better news for equities with crypto ties and members of the ARK Fintech Innovation ETF (NYSEARCA: ARKF) roster.
For example, Venmo – the digital wallet of PayPal (NASDAQ: PYPL) – said Tuesday it will allow credit card users to convert cash back rewards into Bitcoin and other digital currencies.
“The development is part of the broader crypto strategy of Venmo parent PayPal. The company launched a business division dedicated to cryptocurrencies earlier this year after introducing crypto trading to its customers last fall. This latest step gives it an opportunity to usher in a wave of new cryptocurrency holders,” reports Tanaya Macheel for CNBC.
That’s relevant to ARKF investors because PayPal is the exchange traded fund’s fifth-largest holding at a weight of 4.55%, as of Aug. 10.
“Bitcoin, ether, litecoin and bitcoin cash are available to Venmo’s 76 million users. Customers can’t move digital assets off the platform yet, so any rewards converted to crypto will remain in their Venmo app unless they choose to sell them,” according to CNBC.
More Tuesday Tidbits for ARKF
The good news for ARKF on Tuesday didn’t end with PayPal. Crypto exchange operator Coinbase (NASDAQ: COIN), which is just a few months removed from its initial public offering (IPO), reported impressive second quarter earnings after the close of U.S. markets.
The company reported $1.15 billion in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) on net revenue of $2 billion in the June quarter. Coinbase had 68 million accounts, of which 8.8 million are active on a monthly basis, compared with 56 million at the end of the first quarter. Nine thousand institutions are among those clients. Operating margins improved to a stout 80%.
Not only was ARK quick to buy Coinbase soon after the aforementioned IPO, the stock is the third-largest holding in ARKF at a weight of 5%.
Another new addition to the ARKF lineup, Robinhood (NASDAQ: HOOD), also offers crypto trading to its clients. That stock accounts for just over 1% of the actively managed ETF’s weight.
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.