According to information gathered by Bloomberg, Wood’s Ark Investment Management funds have purchased more than 1.3 million shares of Coinbase since the beginning of November, amounting to around $56 million based on Monday’s trading price. The buying frenzy, which began as FTX started to go under, has increased Ark’s overall holdings to nearly 8.4 million shares, up about 19%. This is equivalent to about 4.7% of all the outstanding shares of Coinbase.
Coinbase initially recovered in the days after Ark made his first buy on Nov. 8, mostly as a result of weaker-than-anticipated US inflation data that caused risk assets to soar around the globe. The cryptocurrency exchange’s surge, however, was fleeting, as its stock price dropped for four straight days, including a 9.1% decline on Monday that put it on course to close red.
The majority of Ark’s assets on Coinbase come from its flagship ARK Innovation ETF, which has about 6 million shares and is the fund’s 13th largest position with a weighted of about 3.6%. Even while the ARK Next Generation Internet ETF and ARK Fintech Innovation ETF only each contain slightly more than 1 million shares, according to information on Ark’s website, Coinbase’s weighting in the two funds is significantly greater at 5.4% and 6.3%, respectively.
Ark’s renewed interest in Coinbase contrasts sharply with the attitude that has pervaded Wall Street for the majority of the last six months. This month, analysts from companies like Bank of America and Daiwa Securities downgraded the stock, reducing the number of buy-equivalent analyst recommendations to just 14, the lowest level since August 2021.
In recent weeks, Wood has increased his holdings in additional crypto-related assets. Over 315,000 shares of the Grayscale Bitcoin Trust were purchased by her ARK Next Generation Internet ETF last week as its discount to the value of its underlying cryptocurrency widened. Later on in the week, a purchase of roughly 140,000 shares of the cryptocurrency bank Silvergate Capital Corp. was made after that first acquisition.
The increasing purchase comes as stocks exposed to cryptocurrencies have fallen this year amid a significant selloff in tokens like Bitcoin and Ether. Over 80% of the value of Coinbase and Silvergate Capital has been lost this year.
