Cathie Wood’s Coinbase Strategy


Cathie Wood, CEO of the investment management company ARK Invest, has again acquired shares of the leading cryptocurrency exchange Coinbase which has lost almost 90% of its value in the past year.

The company bought up to $5.8 million worth of COIN on Thursday, split between the ARK Next Generation Internet (ARKW) ETFs and the ARK Fintech Innovation ETF (ARKF), with the former adding 27,813 COIN shares and the latter 144,463. shares. Wood’s fund management company, ARK, is heavily involved in Coinbase stock. In the past month alone, he sold around 800,000 Coinbase shares, worth around $27 million in Jan. 5 close. All of these purchases make Coinbase the 14th holding of the flagship Ark Innovation ETF ARKK.

ARK Investment’s Coinbase and Silvergate Holdings Struggle in Weak Crypto Market

ARKF, launched in 2019, intends to invest in the equity securities of companies that ARK believes are transforming financial services and economic transactions into technology infrastructure platforms. Square, Shopify and PayPal are the top three in the money.

Coinbase is the largest US cryptocurrency exchange. The platform went public in 2021 but is suffering from weakness in the crypto market. Coinbase stock down 86% in 2022. Meanwhile, a small stake in the crypto-focused bank Silvergate, where it sold more than 400,000 shares of the company, worth up to $5 million based on the day’s closing price.

ARK Investment’s Silvergate Holdings Shares Plunge in Value

That leaves the fund with just 3,434 Silvergate shares, the most recent price at just $37,465. As reported, Silvergate cut its workforce by 40% amid a 68% drop in crypto-related filings in the fourth quarter of last year. Following the FTX bankruptcy, the company suffered a bank run that forced it to sell assets at huge losses to honor $8.1 billion in customer withdrawals. Stocks have underperformed in the past two years amid high inflation and a weak currency.

For example, Cathie Wood’s ARK Innovation ARKK lost more than 60% of its value in 2022, leading many investors to withdraw their money from the fund. However, Wood remains optimistic about his investment, saying that they can grow in the long term. In a recent tweet, he said:

“The financial world criticizes and underestimates ARK Invest’s research and investments focused on growth: it rejects our predictions of high profits and companies that hunt for short-term growth high and high long-term benefits.”

It should be noted that Coinbase could not benefit from the failure of the FTX platform last year. In contrast, Binance, the largest cryptocurrency exchange in the world, ended 2022 with a market share of 66.7% compared to 48.7% at the beginning of the year.

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