Ark Invest Buys 53,708 Coinbase Shares

In the wake of the U.S. presidential debate on Tuesday, Ark Invest, which Cathie Wood owns, acquired 53,708 Coinbase shares, valued at approximately $8.4 million.

The shares were distributed among three Ark’s exchange-traded funds (ETFs).

The investment breakdown from Ark’s trade filing indicates that 38,475 shares, valued at $6 million, were added to its flagship Innovation ETF (ARKK).

Furthermore, the Next Generation Internet ETF (ARKW) acquired 9,349 shares valued at $1.5 million, and the Fintech Innovation ETF (ARKF) acquired 5,884 shares valued at $925,000.

Ark Invest resumes the acquisition of Coinbase shares

Ark’s most recent acquisition was its first transaction with Coinbase in early August. It acquired $21.8 million in shares amid a significant decline in the cryptocurrency market, which saw Bitcoin fall below $55,000.

Ark Invest maintains a diversification strategy within its funds, guaranteeing that no asset exceeds 10% of an ETF’s portfolio.

This strategy guarantees that Ark is adequately prepared to adjust its portfolio if Coinbase’s stock value experiences substantial fluctuations compared to its other assets.

Coinbase is currently the fourth-largest holding in Ark’s ARKK ETF, with a portfolio weighting of 6.5%, equating to approximately $355 million per Ark’s disclosures.

Coinbase, valued at $67 million, is the sixth-largest holding in ARKW, accounting for 5.1% of the portfolio.

The second-largest asset in the ARKF fund is Coinbase, with a 7.3% weighting and a value of approximately $60 million.

On Wednesday morning, Coinbase shares experienced a 5% decline caused by broader market declines associated with the presidential debate.

Nevertheless, the stock experienced a minor recovery, concluding the day at $157.15, a 0.8% decrease. The stock has experienced a 9% decline in 2024 but has maintained a 92% increase over the past year.

Analysts attributed the market volatility to a “sell-the-news” reaction following the debate, during which Donald Trump’s performance was perceived as lacking.

The event precipitated a risk-off sentiment, which resulted in a 2.6% decline in Bitcoin’s value. However, it subsequently rebounded.

A Barclays analyst upgrades Coinbase

Barclays, a British banking behemoth, upgraded Coinbase to equal weight from underweight last week, attributing the positive revisions to its matured and evolved business models.

The bank stated that Coinbase could benefit from a more lenient regulatory environment, as both presidential candidates have adopted a more empathetic approach to the digital asset industry.

“We believe that the recent share performance, gradual but ongoing diversification, clear industry leadership in the U.S., and improving environment point to a more balanced risk/reward for Coinbase, and we are moving to Equal Weight,” the analyst wrote, even though we continue to see risks for the company.

According to recent reports, Bank of America (BAC) has recently upgraded its rating on Coinbase shares from underperform to neutral, thereby increasing its price target from $110 to $217.

Investment banking firm KBW has also raised its Coinbase and Bank of America price targets.

In a research analysis, KBW maintained its market performance assessment while increasing its price target for Coinbase from $160 to $230.