• The Ark Innovation ETF (ARKK) still reported holding nearly 5 million shares of Coinbase on Wednesday
  • Coinbase stock is down roughly 20% over the past five days, as of 10 am ET Wednesday

Ark Invest has sold off roughly 1.4 million shares of Coinbase as the crypto exchange faces regulatory uncertainty within a bear market. 

The innovation-focused asset manager run by Cathie Wood sold more than 1.1 million shares of Coinbase from its Ark Innovation ETF (ARKK), the company reported in an email. Ark also sold off about 175,000 shares of the stock from the Ark Next Generation Internet ETF (ARKW) and 110,000 shares from the Ark Fintech Innovation ETF (ARKF). 

Coinbase stock traded for $56.70 at 10:20 am ET, valuing Ark’s offloaded shares at more than $79 million.

ARKK, the company’s largest ETF with about $8 billion in assets under management, currently owns about 5 million shares of Coinbase, worth $283.5 million at press time. The shares account for nearly 3% of the portfolio.

The sales come after the US Securities and Exchange Commission classified nine Coinbase-listed tokens as securities in a complaint alleging that a former Coinbase product manager and people close to him used classified information for insider trading

Though Coinbase’s price was up about 7% on Wednesday morning, according to Google Finance data, the stock is down about 20% from five days ago.

Ark has frequently pushed Coinbase bull case

Ark’s Wood is bullish on crypto. In November 2020, she shared belief that bitcoin could hit $500,000 in the long term. 

The executive noted during Miami’s Exchange ETF conference in April that Coinbase’s decline throughout the year, while crypto companies have raised cash at valuations in the billions, “makes no sense.” 

Ark Invest bought 215,000 shares of Coinbase on a single day last year as bitcoin fell below $30,000 for the first time in months. Coinbase’s share price hovered around $220 at the time. The firm also bought 550,000 shares back in May, when they were worth $50.

Ark analyst Maximilian Friedrich said during a webinar in January that Coinbase is an attractive long-term play, noting the company accounted for roughly 10% of spot trading volume in the crypto market in 2021. 

Ark Research Associate Nishita Jain also pointed to Coinbase’s expanding product set and desire to diversify its revenue stream as reasons to be bullish on the company.

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  • Ben Strack is a Denver-based reporter covering macro and crypto-native funds, financial advisors, structured products, and the integration of digital assets and decentralized finance (DeFi) into traditional finance. Prior to joining Blockworks, he covered the asset management industry for Fund Intelligence and was a reporter and editor for various local newspapers on Long Island. He graduated from the University of Maryland with a degree in journalism. Contact Ben via email at [email protected]