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Only a few days ago, the firm sold part of its shares in Coinbase.
Cathie Wood’s investment management firm ARK Invest has suddenly pivoted to buying the shares of Coinbase Global Inc (NASDAQ: COIN) shares. On Monday, ARK Invest bought a total of 28,632 shares of the crypto trading platform. The acquisition comes after a very long selling spree and coincides with the market crash that took the price of the leading cryptocurrency Bitcoin (BTC) below $50,000.
Cathie Wood’s ARK Invest Commits to Fund Weightings
According to TradingView data, the COIN acquisition summed up to $5.4 million, with the shares closing at $189.5 on Aug. 5.
Per the explanation offered by the firm, the buying and selling of shares is usually carried out to rebalance its asset weightings and ensure diversification within its funds. For context, ARK Invest has an investment strategy that involves not letting any individual holding take up more than 10% of an ETF’s portfolio. Therefore, it would not permit any asset to surpass the value of its other holdings in the fund.
Only a few days ago, the firm sold part of its shares in Coinbase. It offloaded 31,517 shares worth $6.7 million at the time from the Next Generation Internet ETF (ARKW) and another 37,552 shares equivalent to $8 million from its Fintech Innovation ETF (ARKF). This ended up as the biggest single-day divestment since May 7.
On this same day, ARK Invest sold 108,751 ARKB spot Bitcoin ETF shares from its ARKW. This sales summed up to approximately $6.9 million. After the sales, ARKB became the largest holding within the firm’s ARKW ETF. On August 2, its weighting stood at approximately 10.6%, and this represents $142.4 million.
Coinbase shares are capped at only 6.7%, making it the fourth-largest holding in the fund. Its total worth comes in around $90.4 million. However, COIN represents Ark’s largest holding in its ARKF fund at 9.7%, worth $77.4 million. With the recent purchase of additional COIN, the percentage allocated to the shares would have increased.
Bitcoin Recovers Slightly after Price Dip
Speaking of the recent crypto market price plunge, Bitcoin saw its price plunge lower than $50,000 in the wake of Monday’s selloff. This marks the first time the coin will fall to this level since February 2024. Unfortunately, the plunge, about 20%, cleared most of the gain Bitcoin amassed these past few months. In the last 24 hours, the coin has seen some level of recovery.
At the time of this writing, Bitcoin traded at $54,715.83, corresponding with a 3.48% increase in 24 hours. While BTC has recorded up to 93% increase in the last 12 months, COIN has amassed up to 110% surge. As BTC price went down on Monday due to the crash, so did COIN. It lost 20.7% of its previous price level on that day.
This renewed accumulation of COIN by Ark Invest is a major vote of confidence that the worst might have passed for the market overall.
