Bitcoin Factor: Why Cathie Wood Has Exited PayPal To Raise Stake In Jack Dorsey's Block

Cathie Wood-led Ark Investment Management exited out of PayPal Holdings Inc PYPL as it sold its last 100 shares on Feb. 17 this year. 

The investment firm is instead betting on the Jack Dorsey-led Block Inc SQ and the company’s Cash App.

Speaking to CNBC at the Miami Bitcoin 2022 conference, Wood pointed to the organic growth of the Cash App and said while PayPal’s Venmo is accommodating Bitcoin BTC/USD as well, it is more of a “follower.”

“We tend to put our bets with who we believe will be the winners… As we consolidated our portfolios during a risk-off period, we chose Block over PayPal,” said Wood.

See Also: How To Buy Bitcoin (BTC)

Why It Matters: Block is the fourth-largest holding by Ark and makes up 4.44% by weightage of the company’s holdings. The market value of Ark’s Block shares is $931.9 million. In contrast, Ark shed $21 million worth of PayPal shares by February.

The Cash App makes use of the Lightning Network that facilitates fast and cheap transactions.

Wood said on Block and the Lightning Network, “Block’s singular focus on Bitcoin is critical here and this is how Bitcoin is going to proliferate around.”

She said even though Lightning Network has been in test mode for years it has become more “robust” now and is ready for “prime time.”

Price Action: On Friday, PayPal shares closed 1.6% lower at $111.21 in the regular session. On the same day, Block shares closed 2.1% lower at $123.24 in regular trading and declined 0.4% in the after-hours session. At press time, Bitcoin traded 0.15% higher at $42,215.44, according to Benzinga Pro data.

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Photo courtesy: Ark Investment