Ark Invest Cuts Coinbase Stake Amid Surge

Ark Invest, led by the visionary Cathie Wood, has made significant adjustments to its holdings of Coinbase shares. On Tuesday, the firm divested an additional 106,000 shares across three of its flagship exchange-traded funds (ETFs), amounting to $27.2 million, as per the latest trade filings.

Breaking down the sales, Ark Invest sold 66,387 shares valued at $17.1 million from its Innovation ETF (ARKK), 9,123 shares worth $2.3 million from the Next Generation Internet ETF (ARKW), and 30,490 shares equating to $7.8 million from its Fintech Innovation ETF (ARKF).

This move follows a substantial $69 million sale of COIN shares on Monday, bringing the total value of Coinbase shares offloaded by Ark this week to nearly $100 million.

The strategic sell-off comes amid a robust price rally for Coinbase stock, prompting Ark Invest to recalibrate the weightings of its funds. The firm adheres to a strategy designed to prevent any single holding from exceeding 10% of an ETF’s portfolio, ensuring a diversified investment approach. Despite recent sales, Coinbase remains a prominent holding within the ARKK, ARKW, and ARKF ETFs, with current allocations of 10.9%, 12.1%, and 12.4%, respectively.

Ark’s Coinbase holdings command a considerable market value, with ARKK’s stake at $852 million, and ARKW and ARKF’s COIN allocations valued at $211 million and $143 million, based on current market prices. The performance of the ARKK, ARKW, and ARKF funds over the past year has been impressive, recording gains of 67.6%, 96.9%, and 93.3%, respectively.

Coinbase stock itself has experienced a significant upturn, closing at a yearly high of $256.14 on Tuesday. This represents a 12% increase over the previous week and a 48% rise year-to-date. Trading at its highest level since December 2021, COIN still trails 25% behind its all-time peak of $342.98 set in November of the prior year.

With a current valuation of $47.6 billion, according to The Block’s data dashboard, Coinbase continues to be a pivotal player in the cryptocurrency exchange space.

Ark Invest’s decision to reduce its Coinbase exposure reflects a strategic rebalancing in response to the stock’s significant appreciation. This action underscores the firm’s commitment to maintaining a diversified portfolio, aligning with its long-term investment philosophy.

As Coinbase achieves new heights, investors and analysts alike will be watching closely to see how this reallocation impacts Ark’s ETF performance and what it signifies for the broader crypto market’s trajectory.