Ark Invest, led by Cathie Wood, has made a notable shift in its portfolio, purchasing $8.7 million worth of Coinbase (COIN) shares while simultaneously selling $8.6 million of its own spot Bitcoin ETF (ARKB). The move comes amid a turbulent period in the cryptocurrency market, with Bitcoin and other digital assets experiencing significant price declines.
Ark’s Strategic Coinbase Investment
For the first time since October, Ark Invest has increased its stake in Coinbase, acquiring 41,032 shares for its Next Generation Internet ETF (ARKW). This decision follows a sharp drop in COIN’s price, which has fallen roughly 38% from its December peak of $343.62. Ark’s strategy involves maintaining portfolio diversification by ensuring no single holding exceeds 10% of a fund’s total allocation. As of February 25, Coinbase held a 5.5% weighting within ARKW, valued at approximately $94.4 million.
Despite recent losses, Coinbase remains a key component of Ark’s investment thesis. The company plays a central role in the crypto ecosystem, and Ark appears to be betting on its long-term growth potential.
Selling Bitcoin ETF Shares
At the same time, Ark trimmed its position in its own spot Bitcoin ETF, offloading 98,060 shares valued at $8.6 million. This marks Ark’s largest sale of ARKB shares since September when it sold $2.8 million worth. Despite this reduction, ARKB remains the largest holding in ARKW, with a 10.7% weighting and $182.2 million in assets.
Since its launch in January 2024, ARKB has seen net inflows of $2.7 billion, solidifying its position as a leading Bitcoin ETF. However, the recent sales indicate that Ark is adjusting its exposure in response to the ongoing market downturn.
Crypto Market in Turmoil
Bitcoin’s price plummeted 10% over the past two days before a slight recovery, while altcoins suffered even steeper losses. Ethereum dropped 18%, XRP fell 19%, and Solana tumbled 22%. The decline coincided with macroeconomic uncertainties, including President Trump’s tariff policies, the fallout from Bybit’s massive $1.5 billion hack, and the cooling of the recent memecoin trading frenzy.
The crypto market’s volatility has also impacted institutional flows. U.S. spot Bitcoin ETFs saw a staggering $1 billion in net outflows on Tuesday, marking a record daily exit. The GMCI 30 index, which tracks the top 30 cryptocurrencies, slumped 15% before a modest rebound.
Where Does This Leave Investors?
While some analysts speculate that Bitcoin may have peaked, others believe the market remains in the early stages of a broader bull cycle. “Despite recent drawdowns, crypto is still up over 50% from last year, highlighting its long-term resilience,” noted Matt Mena, a strategist at 21Shares Crypto Research.
Ark’s portfolio adjustments suggest a tactical response to market conditions rather than a fundamental shift away from crypto. As volatility persists, investors will be closely watching Ark’s next moves.
Final Note
This article is for informational purposes only and does not constitute financial or investment advice. Always conduct your own research before making any investment decisions.
