Cathie Wood, the CEO of ARK Invest, has once again displayed her confidence in the crypto market by adding $19.9 million worth of Block Inc. shares to her company’s ETFs. This move comes shortly after Wood’s purchase of $21 million worth of Coinbase shares, despite the recent regulatory actions taken against major players in the crypto industry.
The United States Securities and Exchange Commission (SEC) has filed lawsuits against both Binance and Coinbase, alleging regulatory violations, including the offering of unregistered securities. In addition to the SEC lawsuits against Binance and Coinbase, the regulatory challenges have had contrasting effects on the share prices of these companies. While Coinbase’s share price has suffered, Block Inc.’s shares have experienced a notable surge. This surge could be attributed to various factors, such as increased investor confidence in Block’s regulatory compliance or positive market sentiment towards the company’s prospects.
Despite the regulatory challenges faced by the cryptocurrency industry, ARK Invest has shown confidence in Block Inc. ARK Invest acquired a total of 305,573 new Block shares through multiple purchases between June 7 and 8. This significant investment positions Block as ARK’s fourth largest holding, accounting for 4.81% of its portfolio.
The newly acquired shares were allocated to ARK’s different ETFs. The ARK Innovation (ARKK) ETF received 240,174 shares, the ARK Next Generation Internet (ARKW) ETF received 39,099 shares, and the remaining 26,300 shares were allocated to the ARK Fintech Innovation (ARKF) ETF. In addition to Block shares, ARK Invest also purchased 419,324 shares of Coinbase, valued at approximately $21.6 million.
Coinbase’s Advantage: Binance’s Regulatory Setbacks
Wood’s belief regarding the potential benefits for Coinbase in light of Binance’s regulatory lawsuits is based on the notion that Binance’s legal troubles could result in a reduction of competition in the crypto industry. By facing increasing regulatory scrutiny and potential criminal charges, Binance may experience a tarnished reputation and diminished market position.
As a result, Wood suggests that Coinbase, one of the leading cryptocurrency exchanges, could potentially gain an advantage in the long term. With Binance facing allegations of fraudulent activities, the trust and confidence of users and investors in the platform may be significantly impacted. This could lead to a shift in market share, with more users turning to Coinbase as a trusted and compliant alternative.
Wood’s view is predicated on the assumption that regulatory lawsuits against Binance would diminish its competitive standing, potentially resulting in a favorable market environment for Coinbase. However, it’s important to note that the dynamics of the crypto industry can be complex and subject to various factors, making it challenging to predict the exact outcomes of regulatory actions and their impact on different players.
Coinbase: Top Holding in ARK Invest’s Portfolio at 4.39%
As of now, Coinbase continues to hold a prominent position in ARK Invest’s portfolio. It remains the seventh largest holding, accounting for 4.39% of ARK Invest’s overall investment. ARK Invest currently owns a total of 11,440 COIN shares, which are spread across its various exchange-traded funds (ETFs) including ARKF, ARKK, and ARKW.
During the first quarter of this year, ARK Invest continued to increase its stake in Coinbase. They added an additional 8.2% more COIN shares to their existing holdings. This expansion follows notable increases of 20.2% in the fourth quarter of 2022 and 25.2% in the first quarter of the current year.
Cathie Wood’s continued investments in the crypto market demonstrate her unwavering belief in the long-term prospects of cryptocurrencies. As a highly influential figure in the investment world, her actions often attract attention and have the potential to shape market sentiment in the crypto space. Despite the current challenges, Wood’s confidence in the crypto market signals optimism for its future growth and development.