Crypto exchange Coinbase is soon to present its second-quarter results with expectations of doubling its revenue as well as a jump in profit.
On Wednesday, July 31, Ark Invest offloaded a total of 12,077 Coinbase shares worth a staggering $2.7 million in another round of profit booking. Ark Invest’s Next Generation Internet exchange-traded fund (ARKW) diluted the equity in the recent sell-off.
Last month in July, Cathie Wood’s investment management firm liquidated $4.3 million worth of COIN stock. This recent decision to dilute liquidity comes as the asset manager follows the thump rule that any individual investment must not cross 10% of the ETF’s portfolio. This is because Ark Invest aims to maintain diversification with its funds and is likely to consider rebalancing the weightage of COIN stock if its value rises relative to Ark’s other holdings.
Cathie Wood and Ark Invest's trade activity from today 7/31 pic.twitter.com/dx7JdrS7IC
— Ark Invest Daily (@ArkkDaily) August 1, 2024
As per the firm’s latest disclosure, COIN is currently the fourth-largest holding of the ARKW ETF, and has a weightage of 7.3% as of August 1. The other top three holdings are Ark’s own spot Bitcoin ETF (ARKB), Tesla, and Roku shares having a weightage of 11%, 10%, and 8.4%, respectively. the total Coinbase holdings in ARKW after yesterday’s selloff are valued at $102.4 million. The ARKW fund is already up by 33% over the past year.
Last week, Ark Invest had to sell off $7.8 million worth of shares of its spot Bitcoin ETF (ARKB) as the investments exceeded the 10% criteria. Thus, the asset manager has always stayed upbeat about rebalancing its portfolio.
Coinbase stock closed at $224.36 on Wednesday, remaining unchanged for the day but reflecting a nearly 30% increase year-to-date.
Coinbase Q2 Results on Radar
Crypto exchange Coinbase Global Inc (NASDAQ: COIN) is soon to present its second-quarter results with expectations of doubling its revenue as well as a jump in profit, said Bloomberg.
According to researcher CCData, the 30-day average volatility for crypto has been around 52% this year, much less than 795 during the 2021 bull run. Crypto exchanges like Coinbase typically benefit during bull runs laden with market volatility.
The decline in volatility this year has led to many traders stepping back, resulting in a nearly 30% drop in spot trading volume on the exchange for the quarter, CCData reports. Coinbase’s trading volume and revenue are forecast by analysts to drop from the first quarter, and the exchange appears to have lost market share, reported Bloomberg.
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