Ark Invest, the investment firm spearheaded by Cathie Wood, reduced its stake in Coinbase by offloading 25,662 shares. This transaction amounts to a $6.4 million adjustment in its portfolio. The divestment occurred across two of Ark’s leading exchange-traded funds (ETFs), specifically from its Innovation ETF (ARKK) and its Next Generation Internet ETF (ARKW). The shares from ARKK accounted for $5.7 million of the total, while those from ARKW made up the remaining $742,000.
Cathie Wood, CEO of Ark Invest, clarified the rationale behind the recent sales, emphasizing the firm’s dedication to active management. She explained,
We are not dumping. This is what active management is all about.
Wood highlighted the significant appreciation of Coinbase’s value, which necessitated rebalancing to adhere to the firm’s policy of limiting any holding to a 10% maximum of an ETF’s portfolio.
The transaction involved selling 22,690 shares from the ARKK ETF and 2,972 shares from the ARKW ETF. This move comes after Ark Invest previously divested $21 million worth of Coinbase shares, marking a continuous effort to rebalance its holdings.
This sale follows a significant price target adjustment for Coinbase shares by Oppenheimer, a respected investment bank and financial services firm. Oppenheimer raised its target to $276 from $200, reaffirming its confidence in Coinbase with a buy rating. This adjustment reflects a positive outlook on the digital asset sector, especially following the introduction of spot Bitcoin ETFs.
Despite the recent sale, Coinbase continues to hold a significant position within Ark Invest’s portfolio, particularly in the ARKK ETF, where it remains the largest holding with a 9.9% weight. However, in the ARKW fund, Coinbase has moved to the second-largest holding, slightly behind Ark’s own spot Bitcoin ETF (ARKB). This rebalancing reflects Ark Invest’s strategy to prevent any single holding from exceeding 10% of an ETF’s portfolio, ensuring a well-diversified investment approach.
The consistent performance of Ark Invest’s funds, with ARKK and ARKW recording gains of 29.4% and 58.2%, respectively, over the past year, highlights the effectiveness of its investment philosophy. Ark’s proactive management and rebalancing efforts aim to capitalize on market opportunities while mitigating risk, demonstrating the firm’s commitment to achieving long-term growth for its investors.
Oppenheimer’s analysis suggests a robust increase in Coinbase’s trading volume, with projections indicating a rise of 95% quarter-over-quarter and 107% year-on-year, reaching $300 billion in the first quarter of 2024. These figures underscore the growing interest and adoption of digital assets, a trend that Ark Invest has closely monitored and capitalized on through its investment strategies.
Looking at Coinbase Global market performance, COIN is trading at $246, down by 0.78% in the past 24 hours. Over the past 5-days, COIN has lost over 5%, while the monthly chart displays a gain of 8%.
