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ARK Innovation ETF Dips Amid Tech and Crypto Market Selloff

By:
Hassan Maishera

ARKK is one of the worst-performing ETFs so far this year, having lost more than 25% of its value since the start of 2021.

Ark Invest

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Cathie Woods heads Ark Invest, and she has become popular for picking stocks that are out of the ordinary. Her asset management firm also invests in cryptocurrencies as she is bullish on BTC and other cryptos.

Market Selloff Affects Ark Innovation ETF

The shares of Ark Innovation ETF dipped by more than 5% during Friday’s trading session due to the massive selloff within the tech and cryptocurrency markets. Investors sold high-growth, high-valuation stocks that rallied during the early stages of the pandemic following bets that the US Federal Reserve will be more aggressive moving forward.

ARKK suffered huge losses as nine out of the top ten of its holdings experienced a massive selloff. Tesla Inc., ARKK’s largest holding, lost more than 4% of its value yesterday, while Teladoc Health Inc., its second-largest holding, dropped 5.2%.

ARKK performed excellently over the past 20 months as the fund invested mostly in stay-at-home stocks. With the pandemic raging on for months, ARKK was one of the best-performing funds in the world during that period.

ARKK Suffers Huge Losses in Recent Weeks

Cathie Wood’s Ark Innovation ETF has suffered huge losses in recent weeks, down by more than 25% over the past month. The decline comes after the US recorded 210,000 jobs in November, pushing the unemployment rate to a 21-month low of 4.2%. The increasing employment rate spells danger for stay-at-home stocks, and that ultimately affects ARKK’s portfolio.

The decline in the cryptocurrency market also contributed to ARKK’s poor performance. ARKK invests in Bitcoin ETF’s in Canada and other cryptocurrency-focused exchange-traded funds. As a result, the dip experienced in the crypto market affected its performance.

Year-to-date, ARKK’s value has dipped by nearly 25%, making it one of the worst performers in the market. The ETF’s value could dip further if the current market momentum is maintained.

About the Author

Hassan is a Nigerian-based financial Journalist and cryptocurrency investor.

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