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Why is Cathie Wood’s Ark Invest Offloading More Coinbase Stock?

Last Updated January 8, 2024 12:14 PM
Teuta Franjkovic
Last Updated January 8, 2024 12:14 PM

Key Takeaways

  • Ark Invest continues to sell Coinbase shares.
  • Shares sale comes amid market volatility.
  • The company decided to strategically diversify its portfolio.

On Thursday, Cathie Wood’s investment firm, ARK Invest, executed another sale of Coinbase (COIN) shares, specifically from its Innovation exchange-traded fund (ETF). This move represents a continuation of ARK Invest’s recent strategy of adjusting its holdings in Coinbase.

This included the sale of 133,823 COIN shares, worth $20.6 million, on Friday, according to the company’s most recent trade filing .

Cathie Wood’s Ark Invest Sells $50M of Coinbase Shares

Breaking down this sale, Cathie Wood’s investment management firm disposed of 107,151 shares, worth around $16.5 million, from its Innovation exchange-traded fund (ETF). It also sold 15,892 shares valued at $2.4 million from its Next Generation Internet ETF. Meanwhile, it also offloaded 10,780 shares, worth $1.7 million, from its Fintech Innovation ETF.

Ark Invest’s recent sell-off of Coinbase (COIN) shares amounted to a total of $50 million last week. This figure includes $25.3 million worth of shares sold on Wednesday, $4.1 million on Thursday, and Friday’s $20.6 million. This significant divestment occurred despite Coinbase’s stock experiencing a roughly 10% decline.

In December, Ark Invest had also engaged in a considerable sell-off. It unloaded $200 million worth of Coinbase shares during a period when COIN’s price grew more than 40% in a month.

In addition to selling off its Coinbase shares, Ark Invest also adjusted its portfolio by selling a portion of its holdings in Stratasys Ltd. Concurrently, the company made strategic acquisitions by purchasing shares in two other companies: Palantir Technologies Inc. and Iridium Communications Inc.

Selling-Off as SEC’s Bitcoin ETF Decision Looms

The recent sales by Ark Invest come at a time when the cryptocurrency community is awaiting the United States Securities and Exchange Commission (SEC)’s decision on the approval of the first spot Bitcoin ETF for American investors. ARK Invest is among 14 entities  which have submitted applications to the SEC for a spot Bitcoin ETF.

ARK’s own application for a spot Bitcoin ETF, known as ARK 21Shares, was created in partnership with Swiss firm 21Shares. ARK and 21Shares were proactive in updating their filing for the spot Bitcoin ETF ahead of the SEC’s December 29 deadline.

Further advancing this process, the ARK 21Shares Bitcoin ETF filed a registration notice with the SEC on January 4. The SEC has a deadline of January 10 to either approve or deny this ETF application.

Coinbase Stock Dips

As of market close on Friday, Coinbase’s stock was trading at $153.98, a slight decrease of about 1% for the day, according to TradingView data . Over the past year, the stock has seen a rise of more than 350%. However, it still remains down by 55% from its all-time high of $342.98, which it reached at the height of the cryptocurrency bull market in November 2021.

This context of fluctuating stock prices provides a backdrop to Ark Invest’s strategy of rebalancing its fund weightings through these recent transactions.

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