Cathie Wood's Ark Investment Management LLC, one of the leading investment firms in the cryptocurrency industry, recently sold a significant portion of its stake in Coinbase. Despite this, the stock price of Coinbase experienced an unexpected increase.
On July 11th, Ark Investment Management sold approximately 135,152 Coinbase shares worth around $12 million. This marked Cathie Wood's first sale of Coinbase shares since July 26th, following nearly eleven months of continuously acquiring the stock.
Cathie Wood's investment in Coinbase had solidified Ark Investment Management as one of the major shareholders, ranking fourth in terms of the number of Coinbase shares held. However, this recent sale suggests a change in strategy as the company decided to pause its buying spree.
It is noteworthy that Cathie Wood's buying frenzy for Coinbase shares occurred during a period of uncertainty in the cryptocurrency market. This uncertainty resulted from regulatory scrutiny by the US Securities and Exchange Commission (SEC), the consequences of the FTX exchange, and an increase in bankruptcy cases that dampened investor sentiment.
There are no specific reasons as to why Cathie Wood decided to sell a large portion of her Coinbase shares. This move can be seen as a calculated response to the current market conditions.
In recent months, the US regulatory authority has intensified its oversight of the industry, affecting major players like Binance and Coinbase. The SEC has filed lawsuits against both exchanges for allegedly offering unregistered securities.
Despite the significant sale of Coinbase shares by Ark Investment Management, the market reacted unexpectedly, with the stock price surpassing expectations and increasing by almost 10% within a day. In the last 24 hours alone, Coinbase shares saw a 9.78% increase, reflecting a positive investor sentiment.
The stock has seen a rise from the $46 level it traded at in early June to a trading price of $91.54 at the time of writing. This performance of Coinbase's stock is remarkable amidst the backdrop of the cryptocurrency market.
Since the beginning of the year, Coinbase's stock has been on an upward trend, gaining over 150%. This increase has outperformed the entire cryptocurrency market, which grew by approximately 50% during the same period.
Coinbase's performance reflects investor confidence in the platform and its ability to navigate the challenges and opportunities within the crypto industry. Notably, while Coinbase's stock increased by nearly 10% in the past day, the global cryptocurrency market only experienced a 0.5% increase during the same period.
Featured image by iStock, chart from TradingView.
