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Many investors on Wall Street are increasingly becoming bullish about the crypto ecosystem and the technology powering the different digital assets.
Prominent fund manager, Cathie Wood has acquired an additional 158,000 shares of Coinbase Global Inc (NASDAQ: COIN) worth a total of $5 million as the trading platform’s stock continues to take a beating when compared to its spot price earlier in the year. Despite the 6.92% close on Thursday pushing the stock to a price of $34.78, Coinbase (COIN) is still trading around its lowest, having dropped as much as 86% in the year-to-date period.
While the selloffs show that investors are notably shunning the shares of the trading behemoth, Cathie Wood is increasingly becoming bullish on it. The latest acquisition was made through her company’s ARK Fintech Innovation ETF (ARKF) and it comes off as the fourth time Ark Invest will be injected capital into the firm’s stock.
Earlier in December, a total of $3.2 million of the exchange’s stock was acquired by the company as it looks to solidify its bag at this time when most shares are adjudged to be close to their bottom.
Cathie Wood gained her reputation by backing promising stocks that later go on to outperform the general market. Her early bets in Coinbase paid off until the crypto winter sets in that defied all expert’s bullish permutations. This so-called crypto winter has not deterred her interests in Coinbase or other Bitcoin (BTC) focused investments.
As she is gorging up COIN, so also is she stacking up shares from the Grayscale Bitcoin Trust (GBTC), a product on offer by Grayscale Investments, a subsidiary of the Digital Currency Group. In November, Cathie Wood purchased a total of 176,945 shares for a cumulative price of $1.5 million. These investments are currently down as the shares of GBTC are changing hands at a 48% discount to the net asset value of BTC.
Cathie Wood and the Stock Acquisition Motive
Many investors on Wall Street are increasingly becoming bullish about the crypto ecosystem and the technology powering the different digital assets. While many are Bitcoin maximalists who would like to gain exposure to the coin, the acquisition of Coinbase Inc’s stock is a subtle but safe attempt by Cathie Wood to gain exposure to the nascent asset class.
Coinbase provides a platform for crypto trading and custody for both retail and institutional investors. Its business is directly impacted by the events in the broader market which is largely determined by Bitcoin. The low trading values of the exchange’s stock are complementary to the more than 65% drop in the value of the digital currency in the year-to-date period.
For Cathie Wood’s Ark Invest and its associated investment funds, buying shares of Coinbase and Grayscale is an indirect way to expose its clients to the growing world of crypto without the associated risks involved in holding the physical digital currency.