Why Ark’s Coinbase Stock Purchase Represents More Than an Investment
Though comparatively minuscule compared to its overall holdings, the buy is the first since the firm dumped over $75 million USD of COIN in July.
On Monday, October 24, Ark Invest’s Fintech Innovation Fund (ARKF) acquired several thousand shares of stock, from companies like Roku, Block, Robinhood, and Coinbase (COIN), according to data from the Ark Invest Daily Trades tracker, and newsletter.
The most significant buy was that of Coinbase, with a purchase of 10,880 shares at a total of $722,000 USD. Though the significance of the buy wasn’t due to the monetary value but instead represents something else.
Size Doesn’t Matter
The ARKF portfolio is made up of over $61,000,000 USD in COIN shares — weighing in at an eight percent allocation of the fund. Subsequently, this makes COIN the third-largest asset in the fund, only proceeded by Shopify and Block.
Additionally, Ark Invests flagship exchange-traded fund ARKK holds approximately $314,000,000 USD worth of COIN stock, making it the ninth-largest asset in the fund.
Comparatively speaking, the most recent buy, which was less than one million USD seems insignificant to the firm’s overall holdings, however, that’s not the case.
The purchase represents the first since June for the firm and the first publicly bullish nod to the crypto exchange since Ark sold off nearly $75,000,000 USD of the stock in July, as Coinbase faced an SEC probe for the alleged offering of unregistered securities.
Know Your Investments
No matter what the investment is, it is always advisable to do your own research (DYOR), a motto that has gained massive popularity in the crypto space.
As part of that research, it is important to know the players that are the most invested in the stock that you own, as their decision to pump or dump the asset might affect the overall price.
According to its most recent 13F filings, Ark Invest is the fourth-largest corporate shareholder of COIN, controlling over seven million shares of stock. Subsequently, this means anyone invested in COIN, also takes on any volatility that Ark might face — as their decision to buy or sell can impact the stock.
Though a relatively small buy, Ark’s latest COIN purchase seems to represent a bullish nod to the exchange and affirms good standing in the two’s professional relationship.
“I’ve been around in the business for 45 years and I have never seen the opportunities I’ve seen now,” stated Ark Invest CEO Cathie Wood, sharing her overall bullish outlook on the crypto and disruptive technology space in May, adding that “according to our expectations, truly disruptive innovation, which right now is valued in the global public equity markets at roughly $10 trillion USD,” (roughly 10% of the overall global equity market cap).
Wood believes that the $10 trillion USD valuation will scale to $210 trillion by the year 2030. She credits this predicted growth to genomic sequencing, robotics, energy storage, artificial intelligence, and blockchain technology — which are represented by key portfolio positions like Block, Coinbase, and more.
In other crypto news, see where employees stand as institutional investors enter the space.