Ark Invest bought 41,032 Coinbase shares, worth $8.7 million, for its Next Generation Internet exchange-traded fund (ARKW) on Tuesday and offloaded $8.6 million worth of its own spot Bitcoin ETF amid the broad crypto market sell-off.
It’s the first time Ark has bought Coinbase shares for its funds since acquiring $2.2 million worth of COIN on Oct. 8, ahead of pro-crypto Donald Trump's presidential election victory a month later. Coinbase stock subsequently doubled to a new all-time high of $343.62 in December, while bitcoin soared 76% from around $62,000 to a peak of over $109,000 on Inauguration Day.
However, both COIN and BTC have since witnessed significant declines, down approximately 38% and 19%, respectively, exacerbated by this week's crypto price plunge.
Ark’s investment strategy involves letting no individual holding take up more than 10% of a fund's portfolio. This is to maintain diversification within its funds — meaning Ark is likely to continue rebalancing its weightings if the value of Coinbase stock rises or falls significantly relative to Ark's other holdings in its funds.
According to the firm’s disclosures, COIN is currently the sixth-largest holding within its ARKW fund, with a weighting of 5.5%, worth around $94.4 million, as of Feb. 25. Coinbase is presently valued at $39.5 billion, according to The Block’s data dashboard.
Coinbase shares closed down 6.4% on Tuesday at $212.49, now losing over 17% year-to-date, according to The Block's Coinbase page. COIN is currently up 2% in pre-market trading on Wednesday, per TradingView.
The Cathie Wood-led investment firm also sold 98,060 shares of its own spot Bitcoin ETF, ARKB, on Tuesday from the same ARKW fund — worth $8.6 million.
Ark last sold a significant amount of its spot Bitcoin ETF in September, when it offloaded 44,609 ARKB shares, worth $2.8 million at the time.
ARKB remains the top allocation within its Next Generation Internet fund, with a weighting of 10.7%, valued at approximately $182.2 million. Tesla, Roku, Roblox and Robinhood make up the remainder of ARKW's top five positions.
Ark's spot Bitcoin ETF has generated $2.7 billion in net inflows since launching in January 2024, with $4.7 billion in assets under management, according to The Block's ARKB Tracker page.
Ark's shift in allocations comes amid a substantial price plunge across the crypto market this week, with bitcoin dropping 10% over the past two days before recovering slightly. U.S. spot Bitcoin ETFs have seen heavy outflows amid the price action, with the $539 million that excited the funds on Monday followed by record net outflows of around $1 billion on Tuesday.
Altcoins were hit even harder, with ether experiencing an 18% two-day drop, XRP 19% and SOL 22%, before finding support, according to The Block's Prices page. The slump comes amid uncertainty surrounding President Trump's tariff plans, the fallout of Bybit's record $1.5 billion hack and the continued unwinding of the recent memecoin frenzy.
Meanwhile, the GMCI 30 index, representing a selection of the top 30 cryptocurrencies, fell 15% over the last two days before rebounding slightly to 154.48.
"While recent weakness raises concerns about whether bitcoin has peaked, onchain and macro signals suggest we are still in the early-to-mid bull cycle," 21Shares Crypto Research Strategist Matt Mena told The Block. "Despite the recent drawdown, crypto remains up over 50% from a year ago, showing the market’s long-term resilience."
Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.
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