Why Cathie Wood’s Just Bought $50 Million in Robinhood (HOOD) Stock During the Selloff

TLDR

• ARK Invest purchased nearly $50 million in Robinhood shares during Wednesday’s sell-off, making it the largest crypto-linked position in the flagship ARK Innovation ETF at $248 million
• Robinhood stock dropped nearly 9% after Q4 revenue missed analyst estimates as cryptocurrency trading volumes plunged during the Bitcoin pullback
• The company launched the testnet for Robinhood Chain, a new Layer 2 blockchain designed for tokenized real-world assets and institutional financial services
• Robinhood’s prediction markets business doubled in Q4 with $12 billion in contracts during 2025 and already reached $4 billion in 2026
• CEO Vlad Tenev called prediction markets a “supercycle” opportunity that could eventually drive trillions in annual trading volume

Cathie Wood’s ARK Invest made a contrarian bet Wednesday, scooping up $33.8 million worth of Robinhood shares as the stock tumbled nearly 9%. The purchase came as Bitcoin briefly dipped below $66,000 and crypto-linked stocks sold off across the board.

Robinhood Markets, Inc., HOOD

The timing raised eyebrows on Wall Street. Robinhood had just reported Q4 results that missed revenue expectations as cryptocurrency trading volumes dropped sharply. But ARK wasn’t deterred.

The firm doubled down, adding another $16 million in crypto-related stocks including exchange operator Bullish and USDC issuer Circle. The shopping spree pushed Robinhood to the top spot in ARK’s flagship Innovation ETF, with holdings now worth roughly $248 million representing a 4.1% weighting.

Wood appears to be looking past the quarterly earnings miss. Her focus seems fixed on Robinhood’s infrastructure play instead.

The Robinhood Chain Factor

The company just launched the testnet for Robinhood Chain, a permissionless Layer 2 blockchain built specifically for tokenized real-world assets and institutional financial services. This move signals Robinhood’s evolution from a retail trading app into a blockchain infrastructure provider.

ARK’s purchase suggests Wood believes this pivot could reshape the company’s long-term trajectory. While revenue stumbled in Q4, the groundwork for a new business model is taking shape.

The crypto market hasn’t been kind lately. U.S. spot Bitcoin ETFs recorded $276.3 million in net outflows Wednesday, nearly erasing the week’s gains. Total assets under management fell to $85.7 billion, the lowest level since late 2024.

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

Prediction Markets Boom

The numbers back up his enthusiasm. Robinhood’s prediction markets volume more than doubled in Q4, hitting $12 billion in contracts for full-year 2025. The company has already processed $4 billion in 2026.

Robinhood is developing its own prediction market platform as a joint venture with market maker Susquehanna International Group. The 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 compete directly with established players Kalshi and Polymarket in a market that’s seen 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 sits at $135.79, implying 56.9% upside potential from current levels.

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

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