ARK Invest, under the stewardship of the ever-dynamic Cathie Wood, has once again made headlines. This time, it’s for offloading a whopping $25 million worth of Coinbase (COIN) shares as of January 3, amidst a 3% drop in the stock to $152.24. This isn’t a one-off event; since December 2023, ARK has divested over $125 million in shares from the crypto exchange, signaling a significant shift in its investment strategy.
ARK’s Strategic Maneuvers: Beyond Coinbase
Diving deeper into ARK’s recent transactions, the United States-based asset management company has been actively rebalancing its portfolio. Post the Coinbase sell-off, ARK Invest announced the acquisition of 105,201 Tesla (TSLA) shares, valued at nearly $25.3 million. This purchase was distributed across its ETFs, with ARK Innovation ETF (ARKK) snapping up 91,194 Tesla shares, and ARK Next Generation Internet ETF (ARKW) adding 14,007 TSLA shares to its holdings. Despite the recent sell-off, Coinbase continues to be a heavyweight in ARK’s portfolio, particularly in the ARKF ETF, where it represents assets over $145 million as of January 4.
This strategic shift is not just confined to Coinbase and Tesla. On December 5, ARK offloaded 237,572 Coinbase shares from its three funds, netting at least $33 million. This significant sell-off was split across ARK Innovation ETF, ARK Fintech Innovation ETF, and ARK Next Generation Internet ETF. Furthermore, in a surprising move, ARK liquidated its entire Grayscale Bitcoin Trust holdings worth $200 million on December 28, redirecting about $100 million of this into the Bitcoin Futures ETF Bito. These maneuvers are indicative of ARK’s adaptive and forward-thinking investment approach, unafraid to make bold decisions in the volatile world of cryptocurrencies.
The Coinbase Conundrum and ETF Saga
Coinbase, the largest US crypto exchange and a public company, finds itself in a peculiar position. As a potential linchpin in the relationship between the crypto market and traditional equities, its role in the future of exchange-traded funds (ETFs) is significant. However, the company has been embroiled in legal tussles with the Securities and Exchange Commission (SEC), accused of operating as an exchange, broker-dealer, and clearinghouse without appropriate registrations.
This legal drama, however, hasn’t dampened Coinbase’s ambitions. The company’s spokesperson confidently stated their preparedness for ETF approvals and the robustness of their product offerings. This assurance comes amidst ongoing discussions about the US approving a spot-Bitcoin ETF, with Coinbase poised to play a central role in the operation of these securities.
In this convoluted scenario, ARK Invest has not been a mere bystander. The firm, in collaboration with Swiss crypto custodian 21Shares, has thrown its hat in the ring with the ARK 21Shares Bitcoin ETF. This proposed exchange-traded fund, registered with the U.S. Securities and Exchange Commission, is part of a series of applications by various entities seeking approval for a spot Bitcoin ETF. The SEC, which has been cautious in its approach, has until January 10 to decide on ARK’s application, after having previously rejected a similar proposal in 2023.
In essence, ARK Invest’s recent activity, particularly the sale of Coinbase shares, is a testament to its dynamic investment strategy. Cathie Wood and her team continue to navigate the unpredictable waters of the financial world with an eye for opportunity and a readiness to make bold moves. Whether these decisions will pay off in the long run remains to be seen, but one thing is certain: ARK Invest is not afraid to stir the pot, keeping the market on its toes.
