But there might be another important link in the Tesla-Bitcoin trade and that’s the Ark Innovation ETF which according to a recent Barron’s article might have become too successful for its own good. The ETF investing in some of the hottest growth stocks with past year might have reached a capacity limit and is pushing the underlying stocks in the ETF higher on no other basis than just enormous AUM inflow. The biggest position in the ETF is Tesla with a 9.2% weight as of yesterday with the next three positions being Roku, CRISPR Therapeutics, and Square. See the rest of the top positions in the ETF below. While the Tesla position is the biggest for Ark it is only 0.3% of the outstanding Tesla. But our thinking is that a selloff in Bitcoin can cause risk adverse behaviour among investors with the Tesla-Bitcoin-Ark positions and suddenly a vicious selloff has started. Our view is that investors have a large overlap across these combined positions should consider taking some chips off the table, either directly or through hedging using options or futures. John Hardy, our Head of FX Strategy, also mentions on the morning podcast the classic risk-on currency pair AUDJPY is also a way to hedge a risk-off move across markets.