ARK Capitalizes on Coinbase Rally, Sells 199,526 Shares

ARK Invest, a major issuer of Bitcoin ETFs, has recently sold a significant portion of its Coinbase shares. On March 21st, ARK sold 199,526 Coinbase shares from its various ETFs, including ARKK, ARKW, and ARKF. The total sale amounted to approximately $52.3 million. This sale marks one of ARK's largest Coinbase sales in 2023 and comes as the stock price continues to rise, recently surpassing $270 for the first time since December 2021.

ARK Capitalizes on Coinbase Surge with Sale of 199,526 Shares

New York—ARK Invest, a prominent investment firm known for its focus on disruptive technologies, has recently liquidated a portion of its holdings in Coinbase Global, Inc. (COIN), the leading cryptocurrency exchange in the United States. The sale of 199,526 shares was disclosed in a trade notification reviewed by Cointelegraph on March 21, 2024.

Dumping from Innovation and Fintech Funds

The sale primarily involved shares held in ARK's flagship innovation exchange-traded fund (ETF), ARK Innovation ETF (ARKK), with 133,533 shares disposed of. At Coinbase's closing price of $262 on March 21, this transaction alone amounted to approximately $35 million. Additionally, ARK offloaded 59,215 shares from ARK Next Generation Internet ETF (ARKW) and 6,778 shares from ARK Fintech Innovation ETF (ARKF). The total value of these sales, based on closing prices on March 21, reached $52.3 million.

Surge in Coinbase Stock

The sale coincides with a sustained rally in Coinbase stock, which surpassed $270 for the first time since December 2021. TradingView data indicates that COIN briefly touched $276 on March 21. This surge in value follows a period of consolidation, and analysts attribute it to improving market sentiment towards cryptocurrencies and positive developments within Coinbase's business.

ARK's Coinbase Portfolio

ARK's latest sale represents one of the largest cash-ins on Coinbase stock so far in 2024. The firm's previous significant sale occurred on March 11, involving 270,365 shares. Notably, on February 16, ARK made its largest Coinbase sale of the year, disposing of 499,149 shares. At the time, Coinbase shares were trading 37% lower than their current price, around $190.

Coinbase's Performance

Coinbase has experienced a remarkable recovery in recent months, with its stock price up nearly 250% over the past six months. The company's revenue and profitability have improved, driven by increased trading volume and the growth of its subscription and custody services.

ARK's Strategy

ARK's sale of Coinbase shares aligns with its broader strategy of actively managing its portfolio and rebalancing its holdings. The firm has been a long-term investor in Coinbase, acquiring a significant stake following the company's initial public offering in 2021.

Sale of Other Holdings

In addition to Coinbase, ARK has also been actively selling shares of Block, Inc. (SQ), a Bitcoin-focused fintech company co-founded by Jack Dorsey. On March 21, ARK dumped 188,519 Block shares from its ARKK fund, netting approximately $15.8 million.

Robinhood Holdings

ARK also sold 93,002 shares of Robinhood Markets, Inc. (HOOD) from its ARKW ETF. This sale was prompted by the fund's HOOD holdings approaching 5% of its total portfolio weight, which is the limit set by Rule 12d3-1. This rule prohibits ETFs from investing more than 5% of their assets in securities issued by a single registered investment adviser, dealer, provider, or underwriter.

ARK has been gradually selling Robinhood shares to comply with Rule 12d3-1. The firm previously disposed of 583,563 HOOD shares from its ARKK fund on March 14 without citing Rule 12d3-1 compliance.