- ARK Invest, led by Cathie Wood, has sold Coinbase (COIN) stock for the third consecutive day, part of a trend observed for most of this month.
- Despite the surge in Coinbase’s stock value alongside Bitcoin’s rise, ARK Invest continues to divest, aligning with its policy of maintaining a maximum 10% company weight in its holdings.
ARK Invest’s Strategic Divestment from Coinbase
Cathie Wood’s ARK Invest has been actively reducing its stake in the cryptocurrency exchange Coinbase (COIN) for the third straight day, a move that has become a pattern for most trading days this month. Despite Coinbase’s stock remaining close to the year’s high, boosted by the rising Bitcoin market, ARK has offloaded a significant number of shares.
Evaluating the Sell-Off Strategy
ARK Invest, managing ARK Innovation (ARKK), ARK Next Generation Internet (ARKW), and ARK Fintech Innovation (ARKF) ETFs, has sold a total of 82,255 shares, valued at approximately $11.5 million based on the latest closing price. This sell-off is part of a broader trend observed in ARK’s investment strategy, with the firm having reduced its Coinbase holdings on all but two trading days this month.
Coinbase Stock Performance and Bitcoin’s Influence
Coinbase’s stock has experienced a surge, echoing the performance of Bitcoin (BTC), the largest cryptocurrency by market cap, which has seen a 150% increase this year. In parallel, Coinbase’s stock has almost quadrupled, touching highs not seen since April 2022. This bullish trend in the crypto market seems to be influencing Coinbase’s stock value, yet it has not deterred ARK Invest from proceeding with its divestment plan.
Adhering to Investment Policies
St. Petersburg, Florida-based ARK Invest adheres to a policy of maintaining a maximum weight of 10% for any single company in its holdings. The recent rally in COIN stock has led to its weighting in the three ETFs exceeding this threshold, prompting ARK to undertake divestments. This strategy was evident in ARK’s significant $49 million sale of Coinbase shares on a recent Friday, marking the largest sale since July.
Future Implications for ARK and Coinbase
As ARK Invest continues to sell off Coinbase shares, surpassing $120 million in divestments this month, market watchers are keenly observing the implications for both ARK’s investment strategy and Coinbase’s stock performance. While ARK’s move aligns with its investment policies, it raises questions about its outlook on Coinbase’s future amidst a flourishing cryptocurrency market. As Bitcoin and other cryptocurrencies continue to experience notable gains, the investment firm’s approach reflects a cautious yet strategic positioning in the ever-evolving crypto landscape.