Cathie Wood’s ARK Invest has made a notable investment in Coinbase, acquiring 41,453 shares valued at approximately $6.9 million. This purchase comes at a curious time, especially following a period where ARK had been reducing its stake in the popular cryptocurrency exchange.
On February 18, ARK allocated the majority of this investment—29,689 shares worth around $4.9 million—into its flagship Innovation ETF (ARKK). The Next Generation Internet ETF (ARKW) received a $1.2 million boost, while the Fintech Innovation ETF (ARKF) added about $704,000. This strategic move appears to signal a shift, as it reverses a prior decision made on February 5 and 6, when ARK offloaded about $17.4 million in Coinbase shares amid a broader market downturn.
Market observers speculate whether this constitutes a tactical pivot for ARK, suggesting that the firm sees potential value in Coinbase at its current price points. The recent $6.9 million buy signals confidence in a buy-the-dip strategy; an approach for which ARK is well-known. This shift in strategy coincided with a recovery in Coinbase’s stock, which saw a 1% increase, closing at $166.02, and an 8.4% rise over the last five trading days.
ARK typically manages its investments to avoid exceeding a 10% position in its funds, and both the previous selling and recent purchasing activities may indicate portfolio rebalancing rather than a lack of long-term conviction. Currently, Coinbase is the seventh-largest holding in ARKK, accounting for 4% of the ETF, while it represents 5.6% of ARKF.
Despite Coinbase reporting a significant net loss of $667 million for the fourth quarter, largely attributed to unrealized losses in cryptocurrency, some analysts maintain an optimistic outlook. Investment firm Bernstein has retained an outperform rating on the stock with a price target of $440—suggesting more than 200% potential upside. This optimism is driven by expectations of increased retail trading volume and anticipation surrounding regulatory developments affecting the crypto market.
As discussions ramp up in Washington concerning future market structure bills, the fundamental prospects for Coinbase could evolve quickly. For now, Wood’s latest investment indicates she views the current price as an attractive opportunity.
