Ark Invest Buys 53,708 Coinbase Shares Worth $8.4 Million Amid Market Plunge
Date: 2024-09-13 Author: Oliver Abernathy Categories: BUSINESS
Cathie Wood-led investment firm Ark Invest has purchased 53,708 Coinbase shares worth about $8.4 million amid crypto market volatility following Tuesday’s U.S. presidential debate.
The shares were spread across three Ark exchange-traded funds (ETFs).
According to Ark’s transaction report, 38,475 shares worth $6 million were added to the main Innovation ETF (ARKK) .
In addition, 9,349 shares worth $1.5 million were purchased for the Next Generation Internet ETF (ARKW) , and 5,884 shares worth $925,000 were added to the Fintech Innovation ETF (ARKF) .
Ark Fund Resumes Coinbase Stock Purchases
The recent purchase marks Ark’s first Coinbase activity since early August, when they purchased $21.8 million worth of shares amid a sharp decline in the crypto market, with Bitcoin temporarily falling below $55,000.
Ark Invest follows a strategy of diversifying the assets in its funds, ensuring that no single asset exceeds 10% of the ETF’s portfolio.
This approach helps the fund balance its holdings in the event of significant fluctuations in the value of Coinbase shares relative to other Ark holdings.
According to Ark’s reports, Coinbase is now the fourth-largest holding in the ARKK fund, accounting for 6.5% of the portfolio, equivalent to $355 million.
In ARKW, Coinbase is sixth, accounting for 5.1% of the portfolio, worth $67 million.
Coinbase is the second-largest asset in the ARKF, with a 7.3% weighting, equivalent to $60 million.
Coinbase shares fell 5% early Wednesday, coinciding with the broader market decline triggered by the presidential debate.
The stock has recovered slightly, however, ending the day down 0.8% at $157.15. While the stock has lost 9% in 2024, it is still up 92% over the past year.
Analysts attribute the market volatility to a sell-the-news reaction following the debate, where Donald Trump's performance was considered weak.
The event sent the market into a cautious mood, sending Bitcoin's price down 2.6%, though it has since recovered.
Barclays Analyst Upgrades Coinbase Rating
Last week, British banking giant Barclays upgraded its rating on Coinbase shares from "underweight" to "equal weight," citing the company's improved business models as a key factor.
The bank also noted that Coinbase could benefit from a favorable regulatory environment, given that both U.S. presidential candidates have been increasingly friendly to digital assets.
"While we still see risks to Coinbase, we believe the improved environment, profit and loss profile, gradual but ongoing diversification, clear U.S. market leadership, and recent stock performance point to a more balanced risk/reward profile, and we are upgrading our rating to Equal Weight," the analyst wrote.
As previously reported, Bank of America (BAC) recently upgraded its rating on Coinbase shares from "underperform" to "neutral," while increasing its price target for Coinbase from $110 to $217 .
In addition, investment bank KBW also raised its price target for Coinbase shares.
In its research, KBW raised its price target for Coinbase shares from $160 to $230 while maintaining a market perform rating.
