By
Temitope Olatunji
April 26th, 2024
In addition to selling Coinbase shares, Ark Invest also divested 686,864 Robinhood shares from its Next Generation Internet (ARKW) and Fintech Innovation (ARKF) funds.
Ark Invest, a leading investment manager led by renowned investor Cathie Wood recently made headlines with its decision to offload $44.7 million worth of Coinbase Global Inc (NASDAQ: COIN) shares from its Innovation Exchange-Traded Fund (ARKK).
Ark Invest’s Decision to Rebalance Its Funds
According to the company’s latest trade filing, the divestment amounted to 217,305 Coinbase shares. This divestment comes on the heels of a similar move the previous week, where Ark Invest shed $16 million worth of Coinbase stock.
The decision to divest appears to be driven by a desire to rebalance fund weightings, as the surge in COIN’s price has led to an overweighting in Ark’s portfolio. On Wednesday alone, Ark Invest sold 86,298 Coinbase shares, totaling over $17 million.
This rapid divestment reflects Ark’s proactive approach to managing its ETFs in response to market conditions. The divestment from Coinbase shares also suggests that Ark Invest may be reallocating its capital to capitalize on other investment opportunities that offer more favorable risk-return profiles. The bullish sentiment in the crypto market thus far has also justified the ongoing dump off. With Bitcoin’s price soaring to new heights above $63,000, other stocks linked to it are now seeing intensive growth.
Despite recent divestments, Coinbase stock has performed remarkably well, trading at $205.77 at market close on Friday, marking a 22% increase for the week and a 60% increase over the past month. This surge in price has propelled Coinbase’s market valuation to $38.3 billion, according to data from the Block.
However, it’s important to note that while COIN has seen substantial gains over the past year, it remains 40% down from its all-time high of $342.98, set during November 2021’s last crypto bull market peak. Nonetheless, Wednesday saw COIN closing above the $200 mark for the first time since January 2022, despite encountering temporary technical glitches due to heavy web traffic on the Coinbase platform.
Ark Invest’s Other Divestments and Strategic Partnerships
In addition to selling Coinbase shares, Ark Invest also divested 686,864 Robinhood Markets Inc shares from its Next Generation Internet (ARKW) and Fintech Innovation (ARKF) funds, worth around $11.4 million. This divestment coincided with Robinhood’s stock experiencing closing at $16.58 on Friday after a 12% increase for the week.
The timing of Ark Invest’s divestments coincides with a recent announcement from Robinhood to integrate token swaps on the Layer 2 network Arbitrum. This move aligns with the broader trend of crypto platforms exploring innovative solutions to meet the changing demands of users.
On the spot Bitcoin ETF front, Ark Invest announced a strategic partnership with the Chainlink (LINK) network to enhance transparency. This partnership involves integrating Chainlink’s proof of reserve into Ark’s ARK 21Shares Bitcoin ETF (ARKB), allowing anyone to verify ARKB’s Bitcoin holdings through Chainlink oracles. This move towards transparency is expected to set a precedent for other spot Bitcoin ETF issuers.