Cathie Wood’s Ark Invest purchased 53,708 shares of Coinbase, valued at approximately $8.4 million, amid a volatile crypto market following the U.S. presidential debate on Tuesday.
The shares were allocated across three of Ark’s exchange-traded funds (ETFs).
The investment breakdown from Ark’s trade filing shows that 38,475 shares, worth $6 million, were added to its flagship Innovation ETF (ARKK).
Additionally, 9,349 shares, valued at $1.5 million, were purchased for the Next Generation Internet ETF (ARKW), and 5,884 shares, worth $925,000, went to the Fintech Innovation ETF (ARKF).
Ark Resumes Purchasing Coinbase Shares
The recent purchase is Ark’s first activity involving Coinbase since early August, when it acquired $21.8 million worth of shares as the crypto market experienced a sharp dip, with Bitcoin briefly dropping below $55,000.
Ark Invest adheres to a strategy of maintaining diversification within its funds, ensuring that no single asset exceeds 10% of an ETF’s portfolio.
This approach ensures the firm is well-positioned to rebalance its holdings should Coinbase’s stock value fluctuate significantly in relation to Ark’s other assets.
According to Ark’s disclosures, Coinbase now ranks as the fourth-largest holding in its ARKK ETF, with a portfolio weighting of 6.5%, translating to about $355 million.
In ARKW, Coinbase is the sixth-largest holding, representing 5.1% of the portfolio, valued at $67 million.
In the ARKF fund, Coinbase stands as the second-largest asset, with a 7.3% weighting, worth approximately $60 million.
Coinbase shares experienced a 5% drop early on Wednesday, coinciding with broader market declines linked to the presidential debate.
Despite this, the stock recovered slightly, closing the day with a 0.8% decrease at $157.15. Although the stock has seen a 9% decline in 2024, it remains up by 92% over the past year.
Analysts attributed the market volatility to a “sell-the-news” reaction following the debate, where Donald Trump’s performance was viewed as lackluster.
The event triggered a risk-off sentiment, causing Bitcoin to drop 2.6% in value, though it later recovered.
Barclays Analyst Upgrades Coinbase
Last week, British banking giant Barclays upgraded Coinbase to equal weight from underweight, citing its evolved and matured business models as key factors in the positive revisions.
The bank said Coinbase could profit from a friendlier regulatory environment, given that both presidential candidates have taken an increasingly friendly stance towards the digital asset industry.
“While we continue to see risks for Coinbase, we think the improving environment, P&L profile, gradual but ongoing diversification, clear industry leadership in the US, and recent share performance point to a more balanced risk/reward, and we move to Equal Weight,” the analyst wrote.
As reported, Bank of America (BAC) has recently upgraded its rating on Coinbase shares from underperform to neutral, raising its price target for Coinbase to $217 from $110.
Aside from Bank of America, investment banking firm KBW has also increased its Coinbase price target.
In a research analysis, KBW raised its Coinbase price target from $160 to $230 while maintaining its market performance rating.
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