ARK Invest Buys the Dip in Coinbase Shares Amid Market Turbulence

Asset manager ARK Invest has purchased 41,032 shares of cryptocurrency exchange Coinbase Global Inc. (COIN), valued at $9.3 million, as tech stocks dipped and Bitcoin fell to multi-month lows.

Investment Strategy

The buying activity occurred through the ARK Next Generation Internet exchange-traded fund (ETF), an actively managed fund that seeks long-term capital growth by investing in domestic and foreign equity securities of companies relevant to the fund’s investment theme of next-generation Internet.

ARK Invest’s decision to buy the dip comes after Coinbase shares struggled over the past week, with COIN shares dropping over 5% following BofA Securities’ reduction in its price target from $363 to $311. Analysts cited growing competition and pressure on revenue as reasons for the decrease.

Market Volatility

Coinbase stocks also faced challenges as the crypto market experienced turbulence, with billions in liquidations triggered by economic uncertainty and rising costs. The total crypto market capitalization slipped 3.2% to $3.04 trillion, while Bitcoin fell 3.5% to $88,534, levels last seen in November last year.

The tech-heavy Nasdaq Composite slid 1.35%, and investors were concerned about the potential impact of rising costs on inflation and economic uncertainty. However, ARK Invest seems to be bullish on Coinbase, likely due to the company’s stronger-than-expected Q4 earnings, which represented a 138% increase from 2023.

Positive Developments for Coinbase

Further, the U.S. Securities and Exchange Commission has dropped its lawsuit against Coinbase, which was one of the commission’s biggest crypto-related enforcement actions under former chair Gary Gensler. This development, combined with Coinbase’s strong Q4 earnings, may have contributed to ARK Invest’s decision to purchase more shares.

In addition to buying Coinbase shares, ARK Invest also sold 98,060 shares of the ARK 21Shares Bitcoin ETF (ARKB) from its ARKW fund, valued at approximately $8.6 million.

Tips for Investors

  • Keep an eye on market trends and economic developments that may impact crypto markets and individual stocks.
  • Consider the long-term potential of companies like Coinbase, which have demonstrated strong earnings growth and resilience in the face of market volatility.
  • Stay informed about regulatory developments and their potential impact on the crypto industry.

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