ARK Invest's Cathie Wood is no stranger to Bitcoin (BTC 0.64%). She is a big believer in cryptocurrency, and she's been taking advantage of the Bitcoin correction to buy into the potential of digital currencies through stock exchange-traded vehicles. 

Earlier this week she added to her existing Grayscale Bitcoin Trust (GBTC 1.29%) and Coinbase Global (COIN -3.24%) positions. Her purchase of more than 1 million shares of Grayscale Bitcoin Trust on Tuesday is her largest buy of the single-asset trust since last year. When it comes to Coinbase, Wood has bought into the leading crypto exchange nearly 50 times since it went public two months ago. Her latest Coinbase purchase happened on Tuesday. Let's see why these two investments have emerged as smart ways to play the cryptocurrency revolution.

A business person ripping open their work shirt to show a t-shirt with the Bitcoin logo.

Image source: Getty Images.

Grayscale Bitcoin Trust

The first -- and by far, largest -- U.S. exchange-traded trust that only owns Bitcoin is Grayscale Bitcoin Trust. It has $21.9 billion in assets under management. It offers Bitcoin bulls and bears a way to play the popularity of the leading cryptocurrency denomination through a traditional brokerage account. 

The one knock on the trust is its fees. Grayscale Bitcoin Trust charges a 2% annual fee, and it takes that out from the Bitcoin it owns gradually over the course of the year. Buying directly into Bitcoin is cheaper for long-term investors, but traders can appreciate Grayscale Bitcoin Trust as an investment through a commission-free trading platform. Buying and selling Bitcoin can cost as much as 1.5% per transaction through many of the leading exchanges. 

The bullish argument for Grayscale Bitcoin Trust is that it's trading for a lot less than the value of its investments. A share of Grayscale's trust owned $31.64 in Bitcoin as of Wednesday's close. The stock was trading at $27.79, a 12% discount to its cryptocurrency holdings. It would take six years of annual fees to offset the discount, even if there are no guarantees that it will ever trade at net asset value. 

Coinbase Global

Coinbase Global went public two months ago, but it's already the tenth largest holding for Wood's ARK Invest. It's easy to see the appeal for Coinbase as a play on the crypto market. It's the leading trading marketplace for digital currencies with 56 million verified user accounts by the end of March, and the growth has been phenomenal in this volatile climate.

Revenue soared a whopping 845% in its latest quarter, and we're not talking about a small company here. Coinbase trading volume was a beefy $335 billion in the first quarter. It's also now very profitable, earning $771.5 million through the first three months of this year. 

Coinbase hit the market at a reference price of $250 in April, and despite an initial pop it's now literally a broken IPO. Buying Grayscale Bitcoin Trust at a discount is smart. Buying Coinbase for less than its debut price could be even smarter. If you're looking to invest in cryptocurrency and want a fresh approach over just buying directly into Bitcoin and its smaller peers, Grayscale Bitcoin Trust and Coinbase are smart plays for risk-tolerant investors.