Legendary investor Warren Buffet, known as the Oracle of Omaha, recently voiced apprehension towards the current state of markets. Reflecting on the heightened volatility and speculative nature prevalent today, Buffet remarked, “For whatever reasons, markets now exhibit far more casino-like behavior than they did when I was young.”
Buffet’s famous adage about being greedy when others are cautious and cautious when others are greedy takes on new meaning in the context of today’s market environment. Could this be a subtle nod to the excessive greed pervading markets today?
Coinbase Struggles Amidst Bitcoin Surge
As Bitcoin reaches record highs, the largest US-based crypto exchange, Coinbase, experienced a severe outage last week due to a surge in traffic.
The overwhelming traffic led to technical glitches, causing disruptions for users attempting to trade on the platform. Reports emerged of users seeing erroneous zero balances in their accounts, prompting concerns about security and transactions.
In response to the chaos, Coinbase Support assured users, “We are aware that some users may see a zero balance across their Coinbase accounts & may experience errors in buying or selling. Our team is investigating this & will provide an update shortly. Your assets are safe.”
Cathie Wood’s COIN Sell-Off
Renowned investor Cathie Wood, leading ARK Invest, made headlines by offloading around $31 million worth of COIN stock amidst the market turbulence. Despite this move, COIN remains the largest holding in ARK Innovation ETF, standing out as a rare success among Wood’s major picks.
ARK Innovation ETF also maintains significant positions in struggling companies like Tesla Inc and Roku Inc, with both stocks plummeting close to 30% this year. These underperformances, coupled with other misses, have contributed to ARKK’s near 4% loss for the year, while the S&P 500 boasts nearly a 7% increase.
Options for Market Skeptics
For traders wary of Cathie Wood’s approach, inverse ETFs offer a direct avenue to bet against a stock without the complexities associated with options trading. The AXS Short Innovation Daily ETF (SARK), designed to mirror the inverse performance of ARKK, serves as a prime illustration.
Alternatively, investors bullish on Wood’s strategies and seeking to amplify their exposure may opt for leveraged funds such as the AXS 2X Innovation ETF (TARK), aiming to deliver double the daily returns of ARKK. Notably, TARK clinched the title of “Best ETF Launch” at Benzinga’s 2023 Fintech Awards.