On Wednesday, Ark Invest, the prominent investment firm led by Cathie Wood, offloaded 12,077 Coinbase shares from its Next Generation Internet ETF (ARKW), worth approximately $2.7 million. This sale marks Ark Invest’s first divestment of Coinbase shares since July 19, when the firm liquidated $4.3 million worth of COIN shares.
Ark Invest’s strategy typically involves keeping individual holdings below 10% of an ETF’s portfolio to ensure diversification. This principle appears to be at play with this recent sale. If Coinbase’s (COIN) value continues to rise, Ark is likely to rebalance its holdings to maintain the desired diversification within the ARKW fund.
As of August 1, Coinbase remains a significant asset within the ARKW ETF, ranking as the fourth-largest holding with a 7.3% weighting. It trails behind Ark’s own spot Bitcoin ETF (ARKB), Tesla, and Roku, which have weightings of 11%, 10%, and 8.4%, respectively. The current market value of ARKW’s Coinbase holdings stands at $102.4 million. Over the past year, ARKW has performed notably well, with an overall gain of around 33%.
Coinbase’s stock closed at $224.36 on Wednesday, remaining flat for the day but showing a robust increase of nearly 30% year-to-date, according to TradingView. Despite this growth, COIN is still 35% below its all-time high of $342.98, reached in November 2021. With a current valuation of $41.7 billion, Coinbase’s stock performance remains a focal point for investors.
In a related move, Ark Invest also sold 118,209 shares of its ARKB spot Bitcoin ETF last week from the ARKW fund, valued at $7.8 million. This action highlights Ark’s ongoing strategy of managing its ETF holdings to optimize performance and adhere to diversification principles.
Overall, these transactions underscore Ark Invest’s dynamic approach to portfolio management, balancing growth and risk while navigating the volatile landscape of cryptocurrency and technology investments.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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