Why Cathie Wood’s ARK Invest Bought $50 Million in Robinhood (HOOD) Stock During the Sell-off

Posted on by

TLDR

  • ARK Invest acquired approximately $50 million worth of Robinhood shares during Wednesday’s market sell-off, making it the largest crypto-related holding in the flagship ARK Innovation ETF, valued at $248 million
  • Robinhood’s stock declined by nearly 9% following Q4 revenue that fell short of analyst projections, as cryptocurrency trading volumes plummeted during Bitcoin’s pullback
  • The company introduced the testnet for Robinhood Chain, a new Layer 2 blockchain tailored for tokenized real-world assets and institutional financial services
  • Robinhood’s prediction markets business doubled in Q4, with $12 billion in contracts for the full year 2025 and already reaching $4 billion in 2026
  • CEO Vlad Tenev described prediction markets as a “supercycle” opportunity that could ultimately drive trillions in annual trading volume

Cathie Wood’s ARK Invest made a contrarian move on Wednesday, buying $33.8 million worth of Robinhood shares as the stock dropped nearly 9%. The purchase occurred when Bitcoin briefly fell below $66,000 and crypto-related stocks sold off broadly.

HOOD Stock Card

The timing drew scrutiny on Wall Street. Robinhood had just released Q4 results showing revenue fell short of expectations, with cryptocurrency trading volumes plunging sharply. However, ARK wasn’t discouraged.

The firm increased its position, adding another $16 million in crypto-related stocks, including exchange operator Bullish and USDC issuer Circle. This buying spree propelled to the top position in ARK’s flagship Innovation ETF, with holdings now valued at approximately $248 million, accounting for a 4.1% weighting.

Wood seems to be overlooking the quarterly earnings shortfall. Instead, her attention is fixed on Robinhood’s infrastructure efforts.

The Robinhood Chain Aspect

The company recently launched the testnet for Robinhood Chain, a permissionless Layer 2 blockchain specifically developed for tokenized real-world assets and institutional financial services. This action indicates Robinhood’s transition from a retail trading application to a blockchain infrastructure provider.

ARK’s purchase implies Wood believes this shift could reshape the company’s long-term path. Although revenue declined in Q4, the foundation for a new business model is emerging.

The crypto market has not been favorable recently. U.S. spot Bitcoin ETFs saw $276.3 million in net outflows on Wednesday, nearly wiping out the week’s gains. Total assets under management dropped to $85.7 billion, the lowest since late 2024.

has since stabilized around $67,200, but institutional buyers remain cautious. The exodus from ETFs shows many investors are waiting on the sidelines for clearer signals.

Prediction Markets Surge

CEO Vlad Tenev presented a different story to investors during Tuesday’s earnings call. He highlighted prediction markets entering a “supercycle” that could eventually drive trillions in annual trading volume.

The figures support his optimism. Robinhood’s prediction markets volume more than doubled in Q4, reaching $12 billion in contracts for the full year 2025. The company has already processed $4 billion in 2026.

Tenev told CNBC he remains “very bullish” on crypto over the long term. The company plans to expand both its crypto offerings and its rapidly expanding prediction markets business.

Robinhood is developing its own prediction market platform in a joint venture with market maker Susquehanna International Group. This move would give the company more control over contract offerings and potentially better profit margins than partnering with existing exchanges.

The platform is expected to launch later this year. It will directly compete with established players Kalshi and Polymarket in a market that has experienced explosive growth.

Investors will get more details at Robinhood’s “Take Flight” event scheduled for March 4. Tenev is expected to unveil new products and provide updates on upcoming initiatives.

Wall Street analysts maintain a Strong Buy consensus rating on Robinhood stock. The rating is based on 14 Buys, three Holds, and zero Sells assigned in the past three months. The average 12-month price target stands at $135.79, implying 56.9% upside potential from current levels.

Robinhood’s shares have lost nearly a third of their value year-to-date following Wednesday’s decline.