ARK Invest sells $49.2 million worth of Coinbase shares, taking advantage of rising share price.
ARK’s sale of GBTC reflects a strategy of portfolio diversification in the volatile cryptoasset market.

In a strategic move that has captured the attention of the cryptocurrency market, ARK Invest, led by Cathie Wood, has sold a significant amount of shares of Coinbase (COIN), the popular cryptocurrency exchange. The event marks ARK’s largest sale of Coinbase shares since July and coincides with a surge in the stock price, reflecting a calculated and well-timed tactic by the St. Petersburg, Florida-based investment manager.

Consistent Sales in a Rising Market

ARK Invest has been selling Coinbase shares steadily in recent weeks. The most recent sale, made on Friday, involved 335,860 shares, making it the largest since they sold 480,000 shares valued at $50.5 million in July.

These shares were sold through three exchange-traded funds (ETFs), primarily from the Innovation ETF (ARKK). At Coinbase’s closing price, the sale would have generated about $49.2 million.

ARKK’s strategy focuses on maintaining a balance in the weighting of its ETFs, ensuring that individual holdings neither fall below 2% nor exceed 10% of the fund’s value. However, the recent rally in COIN’s share price, reaching levels not seen since April 2022, has led to its weighting in all three ETFs comfortably exceeding 10%.

Coinbase: A Strong Asset in ARK’s Portfolio

Despite recent sell-offs, Coinbase shares still represent a sizable portion of ARK’s ETFs. COIN makes up more than 11% in ARKK and the Next Generation ETF (ARKW) and more than 13% in the Fintech Innovation ETF (ARKF). COIN’s closing price on Friday was $146.62, up 7.66% on the day.

Portfolio Diversification: Selling Grayscale Bitcoin Trust Shares

In addition to the Coinbase stock sales , ARK also sold 102,672 shares of Grayscale Bitcoin Trust (GBTC), valued at about $3.6 million. GBTC represents 8.33% of ARKW. These shares are an important part of ARK’s cryptoasset portfolio, and their sale could indicate a focus on diversifying and rebalancing the portfolio in response to changing market dynamics.

Cryptoasset Investment Implications and Strategies

ARK’s decision to sell a significant portion of its Coinbase shares at a time of market upside suggests an investment tactic focused on capitalizing on market fluctuations and rebalancing its portfolio .

ARK’s focus on maintaining specific proportions within its ETFs demonstrates a disciplined investment strategy, adapting to market variations to maximize returns and minimize risk.

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Filed under: Bitcoin - @ December 12, 2023 10:25 am