Ark Invest has recently made a significant move by selling 74,291 Coinbase shares, valued at $20.8 million, across three exchange-traded funds. This decision follows their previous sale of over $100 million worth of Coinbase shares last week when the price of COIN reached new yearly highs. The firm sold shares from its Innovation ETF (ARKK), Next Generation Internet ETF (ARKW), and Fintech Innovation ETF (ARKF), with the aim of keeping any single holding below 10% of an ETF’s portfolio for diversification.
Coinbase currently holds the position of the largest holding in ARKK, ARKW, and ARKF ETFs, weighing 10.6%, 10.9%, and 12.7%, respectively. The market value of ARKK’s Coinbase holdings stands at $826.6 million, with ARKW and ARKF’s investments valued at $188.9 million and $147.9 million. Ark Invest might continue to rebalance its funds if Coinbase’s stock continues to rise in order to maintain diversification within its portfolios.
In addition to selling off Coinbase shares, Ark Invest also divested $7.9 million of Jack Dorsey’s Block shares and $31.5 million of Robinhood (HOOD) stock on Monday. The firm had previously unloaded $5.76 million of HOOD stock on Friday. These sales indicate a shift in Ark Invest’s investment strategy, possibly due to Cathie Wood’s short-term pessimistic outlook on crypto stocks.
Despite the recent sell-off by Ark Invest, Coinbase’s stock closed at $279.71 on Monday, marking a nearly 10% increase for the day and a 25% rise over the past week. Year-to-date, COIN has surged by 62%, indicating strong performance. However, Coinbase shares are still trading 18% below their all-time high of $342.98 in November 2021.
Coinbase’s recent rally has coincided with a broader downturn in U.S. stocks on Monday, with its shares closely following the cryptocurrency market movements. Bitcoin, for example, is currently trading at $70,500, reflecting a 5% increase over the last 24 hours and a 12% rise in the past week. Ark Invest’s decision to divest from Robinhood and Coinbase may be influenced by these market trends and their cautious approach to crypto stocks.
While Ark Invest has sold off significant holdings in Coinbase and other stocks, reports suggest that they are considering an investment in the upcoming Reddit IPO. This demonstrates Ark Invest’s flexibility and willingness to adapt their investment strategy based on changing market conditions and opportunities.
Ark Invest’s recent sale of Coinbase shares and other stocks reflects a strategic decision to diversify its portfolios and adjust its investment holdings in response to market trends. By rebalancing funds and exploring new investment opportunities, Ark Invest aims to maintain a dynamic and adaptive approach to managing its ETFs.