Cathie Wood’s ARK Invest has made new moves in the crypto sector, selling off some Coinbase shares while adding to its position in Robinhood. The asset management firm sold nearly $5.3 million worth of Coinbase shares on Monday from its ARK Fintech Innovation ETF, taking advantage of the crypto exchange’s stock price hitting a 19-month high. At the same time, ARK Invest acquired $1.2 million in Robinhood stock, marking its fifth purchase of the trading app company this month. These strategic trades come as cryptocurrencies show signs of recovering from a challenging bear market in 2022.
ARK Invest’s Adjustment in Holdings
On November 28, ARK Invest sold 43,956 Coinbase shares as the stock closed at $119.77, its highest point since April 2021. This sale of $5.26 million worth of Coinbase shares represents ARK’s largest divestment of the crypto exchange’s shares since late July. Back in July, Cathie Wood’s firm sold over $100 million worth of Coinbase shares when prices were trading around $90. ARK Invest has also been reducing its shares of Grayscale Bitcoin Trust (GBTC), a popular cryptocurrency investment vehicle. On November 24, ARK’s Next Generation Internet ETF sold 94,624 GBTC shares worth around $3 million. Over the past month, ARK has divested nearly 700,000 GBTC shares. However, these sales may not necessarily indicate a bearish sentiment toward Bitcoin. According to Bloomberg ETF analyst Eric Balchunas, ARK is likely rebalancing its weightings and selling GBTC due to its significant surge of 76% since August. ARK still aims to maintain a 9% allocation to GBTC despite the sales. “Since GBTC is up 76% since August, ARK has to sell many shares to keep a 9%-ish weighting. And even with that selling, its weighting has gone up,” Balchunas noted.
Focus on Robinhood and SoFi
Despite trimming its Coinbase and GBTC stakes, ARK Invest continues to show confidence in Robinhood, the commission-free trading app popular among retail investors. On Monday, ARK purchased 143,063 Robinhood shares worth $1.2 million. This marks ARK’s fifth purchase of Robinhood stock this month, demonstrating their ongoing support for the company despite its recent challenges. Robinhood laid off 23% of its staff in August 2022 and an additional 7% in June 2023 due to declining active users and trading activity. However, the platform has experienced a spike in crypto trading volume in October, up by 92%, even as overall monthly users dropped. This renewed interest in digital assets could benefit Robinhood’s crypto-friendly platform. In addition to Robinhood, ARK has also been acquiring shares of SoFi, a crypto-friendly banking app. On November 27, ARK’s Fintech Innovation ETF acquired 252,421 SoFi shares, bringing their total holdings to 1.6 million SoFi shares worth $11 million year-to-date.
Cathie Wood and ARK Invest seem to be hedging their bets, adjusting their exposure to Coinbase and GBTC while continuing to build positions in Robinhood and other crypto-related stocks such as SoFi. These strategic moves demonstrate ARK’s flexibility and adaptability in volatile markets. While capturing gains in the current market conditions, ARK Invest aims to maintain stakes in crypto and fintech stocks in case the sector heats up again. As cryptocurrencies emerge from a challenging bear market, ARK’s agility and strategic decision-making could prove to be advantageous.
