Ark Invest has made a strategic move by acquiring 12,994 Coinbase shares valued at $2.2 million for its Fintech Innovation ETF (ticker ARKF) on Tuesday. This purchase comes after the firm offloaded $36.4 million in Robinhood stock, showcasing contrasting performances between the two trading apps.
This marks the first time Ark has invested in Coinbase shares since purchasing $8.4 million worth of COIN on September 11. This previous acquisition occurred during a dip in the crypto market post-U.S. presidential debate, which saw Bitcoin briefly drop below $55,000.
According to Ark’s investment strategy, no single holding should account for more than 10% of an ETF’s portfolio. This approach ensures diversification within its funds, indicating that Ark is likely to continue rebalancing its investments based on significant fluctuations in the value of Coinbase stock relative to its other holdings.
As of October 9, Coinbase (COIN) has become the second-largest holding within the ARKF ETF, following Shopify, with a weighting of 7.4%, which is approximately $64 million. Currently, Coinbase holds a market valuation of $31.2 billion, according to data from The Block.
Under the leadership of Cathie Wood, Ark Invest also sold over 1.4 million Robinhood shares on the same day, worth $36.4 million. Specifically, Ark offloaded around 1.1 million Robinhood shares (valued at $28 million) from its Innovation ETF (ARKK), 191,445 shares (valued at $4.9 million) from its Next Generation Internet ETF (ARKW), and 135,665 shares (valued at $3.5 million) from its Fintech Innovation ETF (ARKF).
Currently, HOOD is Ark’s fifth-largest holding in the ARKF ETF and the seventh-largest in both ARKW and ARKK funds, each holding just under 5%, with valuations of $42.5 million, $68.2 million, and $273.8 million, respectively.
This year has seen a stark contrast in fortunes for these two stocks. Coinbase shares have dropped by over 33% in the past six months, leading to a 3% negative return for 2024, despite a strong start to the year. COIN closed down 0.7% on Tuesday at $167.68.
Meanwhile, Robinhood shares have surged nearly 45% over the last six months, boasting a remarkable 101% return year-to-date, closing up almost 10% on Tuesday at $25.62.
Recently, Robinhood has expanded its interests in the crypto industry, launching crypto transfers in Europe earlier this month and reportedly planning a potential stablecoin. Additionally, Robinhood announced plans to acquire the crypto exchange Bitstamp in a potential $200 million deal. Furthermore, Politico reported that Robinhood's Chief Legal Officer, Dan Gallagher, could be nominated as the next Securities and Exchange Commission chair if Donald Trump wins the upcoming U.S. presidential election.
Disclaimer: The Block is an independent media outlet providing news, research, and data. As of November 2023, Foresight Ventures is a majority investor in The Block.
