ARK Invest Reduces Stake in Coinbase, Selling $12 Million Worth of Shares

ARK Invest Reduces Stake in Coinbase, Selling $12 Million Worth of Shares

ARK Invest, the prominent Bitcoin asset management firm led by Cathie Wood, has decided to reduce its stake in Coinbase, the well-known cryptocurrency exchange. The firm has sold $12 million worth of Coinbase shares, bringing its stake down to 6.2%. This move comes amidst recent developments surrounding Coinbase and regulatory concerns.

ARKK Holdings of Coinbase (COIN)
ARKK Holdings of Coinbase (COIN)

ARK Invest’s Reduction of Coinbase Stake

ARK Invest, renowned for its technology-focused investments, has been a significant holder of Coinbase shares across its funds. However, the firm has decided to sell $12 million worth of shares, which has resulted in a reduced stake of 6.2% in Coinbase. This strategic decision indicates a shift in ARK Invest’s investment strategy regarding Coinbase.

Coinbase’s Recent Surge and SEC Lawsuit

Coinbase’s stock has experienced substantial growth in recent weeks, with an increase of over 70% since the SEC filed a lawsuit against the exchange on June 6. The lawsuit alleges that Coinbase failed to register its lending products as securities with the SEC. Despite the legal challenges, Coinbase’s stock has performed remarkably well, attracting investor attention.

Coinbase’s Surveillance-Sharing Agreement and Spot Bitcoin ETF

Coinbase has entered into a surveillance-sharing agreement with five spot bitcoin ETF applicants. This agreement could play a crucial role in securing approval for Coinbase’s own spot bitcoin ETF from the SEC. The SEC has shown hesitancy in approving spot bitcoin ETFs due to concerns about market manipulation. However, the presence of a comprehensive surveillance-sharing agreement could sway the SEC’s decision in favor of approval.

Increase in Coinbase Stock After News Break

When the news of ARK Invest’s reduction in Coinbase stake broke, Coinbase’s stock experienced a significant surge of 16%. The stock briefly surpassed $90, demonstrating the market’s response to this development. It highlights the impact that ARK Invest’s investment decisions can have on the performance of Coinbase’s stock.

ARK Invest’s History of Buying Coinbase Shares

ARK Invest began accumulating Coinbase shares in March, with an initial purchase of $117 million worth of COIN. This was followed by additional purchases of $33 million in shares in April and May. The most recent purchase took place in June, amounting to approximately $40 million worth of shares. ARK Invest’s significant investments in Coinbase have positioned it as one of the largest holders of Coinbase stock.

Conclusion

ARK Invest’s decision to reduce its stake in Coinbase by selling $12 million worth of shares reflects a change in its investment strategy. Despite Coinbase’s recent surge in stock price and the potential for a spot bitcoin ETF approval, ARK Invest has opted to reallocate its funds. The dynamic nature of the cryptocurrency market and regulatory landscape necessitates constant evaluation and adjustment of investment portfolios.

FAQs

Q1: What is ARK Invest? ARK Invest is a Bitcoin asset management firm known for its focus on technology investments. Cathie Wood leads the firm and guides its investment decisions.

Q2: How much has ARK Invest sold in Coinbase shares? ARK Invest has sold $12 million worth of Coinbase shares, reducing its stake in the cryptocurrency exchange to 6.2%.

Q3: Why has Coinbase’s stock surged recently? Coinbase’s stock has experienced significant growth despite a recent lawsuit filed by the SEC. The market has responded positively to Coinbase’s performance and potential.

Q4: What is the surveillance-sharing agreement between Coinbase and spot bitcoin ETF applicants? Coinbase has entered into an agreement to share surveillance data with five spot bitcoin ETF applicants. This agreement could increase the likelihood of SEC approval for Coinbase’s own spot bitcoin ETF.

Q5: How has ARK Invest historically invested in Coinbase? ARK Invest has been actively accumulating Coinbase shares since March, with substantial purchases totaling millions of dollars across various funds.