Cathy Woods Confirms ARK Invest Dumped Coinbase Shares
- Ark Investment Management sold a major stake in Coinbase Global shares (COIN) on a volatile trading day late in July, revealed CEO and founder Cathie Wood.
- According to the company’s holdings data, the firm still owns around 4.6 million Coinbase shares, making it one of the biggest COIN holders.
As the United States Securities and Exchange Commission started probing the crypto exchange giant Coinbase about whether some of the listings could be classified as securities, exchange-traded fund (ETF) manager Ark Investment Management sold a major stake in Coinbase Global shares (COIN) on a volatile trading day late in July.
On Monday at Bloomberg TV, Ark’s Chief Executive Officer (CEO) Cathie Wood revealed that the main reason behind the sell-off was SEC’s investigation, leading to a slight “thesis risk” increase in its shares.
Notably, three of the Ark’s ETFs dumped 1.46 million shares – “very little,” Wood said – on July 26 for the first time this year. According to the company’s holdings data, the firm still owns around 7.1 million Coinbase shares, making it one of the biggest COIN holders.
Wood said that her company opted to sell some of its large COIN holdings because of the reported SEC probe and the possibility of change in the exchange’s business model. If Coinbase didn’t register them with regulators, it wasn’t clear how many tokens it would have to remove from the exchange or how the exchange’s business model would change, Wood said. She added that as Shopify Inc. had also decreased at the same time, Ark “swapped” some Coinbase shares for Shopify.
It is worth noting that the SEC probe started with the federal prosecutors’ insider trading case against Ishan Wahi, a former employee at the exchange. However, Wood clarified that this case was not behind the fund’s decision to sell.
However, the company still remains bullish on the crypto industry. In a letter to clients on Monday, Ark analyst Yassine Elmandjra mentioned Coinbase’s recent collaboration with asset manager BlackRock (BLK) by writing:
“BlackRock’s decision to partner with Coinbase is a strong signal that institutions consider crypto – starting with bitcoin [BTC] – a new asset class. We agree that bitcoin has earned an allocation into well-diversified portfolios.”
This year, as the Federal Reserve raised rates and growth stocks suffered, Ark’s funds experienced wild swings. In July, the company announced that it would close its Transparency ETF (CTRU), marking the first time it had terminated a fund.
Wood believes that the US economy is already in a recession, and the Fed will need to start easing its monetary policy sometime in 2023. She claimed that since businesses in the “innovation” sector will flourish in difficult times, her firm will continue to invest throughout the slump.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
