ARK Invest Sells Additional $20.6M Coinbase Shares To Rebalance ETF

ARK Invest, the renowned investment firm led by Cathie Wood, sold a further $20.6 million worth of Coinbase (COIN) shares on Jan. 5 across three of its exchange-traded funds (ETFs). The company offloaded a total of 133,823 COIN shares, which closed last week at $153.98.

On Jan. 8, ARK Invest shared its trades for Jan. 5 on X (formerly Twitter), which included a sale of 107,151 Coinbase shares from its ARK Innovation ETF (ARKK), 10,780 from its ARK Fintech Innovation ETF (ARKF), and 15,892 from its ARK Next Generation Internet ETF (ARKW). Moreover, the company sold some of its Stratasys holdings and purchased shares of Iridium Communications and Palantir Technologies.

Cathie Wood and Ark Invest's trade activity from today 1/5. pic.twitter.com/mJ9Cfxx3Ot

— Ark Invest Daily (@ArkkDaily) January 6, 2024

Adding to the $4.1 million worth of COIN it sold on Jan. 4 and $25.3 million on Dec. 3, Ark unloaded a total of $50 million in Coinbase shares from its funds last week — despite the stock falling around 10%.

ARK ETFs Allocation Strategy

This series of sales is a continuation of the company’s strategy to maintain balance in its portfolio, specifically to prevent any single stock from exceeding 10% of an ETF’s total value. The bulk of ARK’s Coinbase investment lies in its ARKK fund, holding more than $850 million in COIN. 

The recent offload reduced ARKK’s holding in COIN to 10.04%, suggesting that ARK may soon cease further sales from this ETF unless there’s another surge in Coinbase’s share price. The ARKF and ARKW ETFs have lesser holdings in Coinbase, but their weightings are slightly higher at 13.41% and 10.37%, respectively.

The firm’s strategy of rebalancing its fund weightings was also prominent in December last year when it sold $200 million worth of Coinbase shares following a 40% surge in COIN’s price. In December and January alone, the company netted about $78 million from its sale of Coinbase shares. 

Coinbase stock traded for $153.98 at market close on Jan. 5, down around 1% on the day, as per the TradingView. Despite this, the stock has experienced an impressive 350% surge over the past year. However, it remains 55% down from an all-time high of $342.98, recorded during the peak of the crypto bull market in November 2021.

The sales come as the crypto community waits impatiently for the US SEC to approve or deny the first spot Bitcoin ETF available for US investors. ARK Invest is among the 14 firms that have filed for a spot BTC ETF with the SEC. ARK 21Shares, ARK’s spot Bitcoin ETF, was created in collaboration with Swiss firm 21 Shares, which provides crypto exchange-traded products.