- February 18, 2024
- Posted by: [email protected]
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ARK Invest, spearheaded by influential Bitcoin advocate Cathie Wood, has opted to sell a substantial amount of Coinbase stock ahead of the crypto exchange’s robust earnings report. In a report on Thursday, ARK Invest disclosed the sale of $34.3 million worth of Coinbase shares across three of its funds: the ARK Innovation ETF (ARKK), the ARK Fintech Innovation ETF (ARKF), and the ARK Next Generation Internet ETF (ARKW). Notably, this move marks the first divestment by ARK Invest from Coinbase since January 11.
The timing of this sale aligns with a notable upswing in Coinbase’s stock price, surging by 11% in after-hours trading following the release of the company’s earnings report. Currently, ARK Invest stands as the second-largest holder of Coinbase stock, underscoring the significance of this decision.
ARK Invest has been engaged in several substantial sales of Coinbase shares in recent months. In December of the preceding year, the firm offloaded $49.2 million worth of Coinbase shares, constituting one of its most substantial sales since July, when it divested 480,000 shares valued at $50.5 million. Further sales occurred in March of the same year, involving 160,887 shares valued at $13.5 million. The trend continued into the new year, with a sale of 166,183 shares worth $25.3 million in January.
Cathie Wood, renowned for her optimistic stance on Bitcoin and other cryptocurrencies, has been a prominent figure in the crypto space. The decision by her firm to divest Coinbase shares might raise questions among investors, especially given the positive earnings report and the recent surge in Bitcoin’s price. However, it’s crucial to recognize that ARK Invest adheres to a dynamic investment strategy, continually adjusting its portfolio based on market conditions and the firm’s outlook.
Coinbase recently unveiled its fourth-quarter earnings for 2023, reporting a profit of $273.4 million compared to a loss of $557 million during the same period the previous year. This profitability follows the approval by the U.S. Securities and Exchange Commission (SEC) of spot bitcoin exchange-traded funds (ETFs), catalyzing renewed interest in the cryptocurrency market. The approval led to a significant 57% increase in Bitcoin’s price in the fourth quarter of 2023, contributing to a 64% rise in Coinbase’s transaction revenue, reaching $529.3 million.
Attributing its return to profitability to the surge in cryptocurrency prices and heightened interest in its USD Coin (USDC) product, Coinbase has strategically positioned itself. The platform enables users to earn rewards by holding the stablecoin on its platform. In a recent television ad, Coinbase creatively challenges traditional United States fiat currency, humorously portraying it as a penny coin in need of a digital upgrade to replace outdated physical currency. This aligns with Coinbase’s history of releasing advertisements challenging traditional norms, as seen in their May 2023 ad emphasizing the importance of crypto for updating the financial system and dispelling misconceptions surrounding cryptocurrency’s nature.
