Ark Invest Sells $12 Million Coinbase Shares Amid Rally

Key Insights

• Cathie Wood, CEO of Ark Invest, sold nearly $12 million worth of Coinbase shares during a rally.
• This marks the second time in 2023 that Wood’s company has sold Coinbase stock, reducing their holdings.
• But it’s not just Ark Invest that has been selling off Coinbase shares.

Ark Invest CEO, Cathie Wood, had reduced her Coinbase shares worth nearly $12 million on Tuesday after a rally over $90.

This sale marks the second time in 2023 Wood’s company is seen selling Coinbase stock.

The fund now has a total of $711.24 million or 8.25% worth of Coinbase shares. Ark is the fourth-largest owner of Coinbase shares, having been buying them on falling prices for nearly 11 months.

But it’s not just Ark Invest that has been selling off Coinbase shares.

Recall that on the 11th of March, ARK Fintech Innovation ETF sold $13.5 million worth of Coinbase shares, at around $84.

Several Coinbase executives, including Brian Armstrong, have also been selling their shares. In June, the company’s chief accounting officer, Jennifer Jones, sold 74,375 shares for $5.2 million. In July alone, Coinbase executives sold 88,058 shares for $6.9 million.

Why sell Coinbase stocks? Is everything okay with the crypto exchange?

What’s Happening With Coinbase Stocks?

In total, since the beginning of the year, the shares of the crypto platform have risen in price by 165%. The latest rise came after Cboe submitted order amendments for five bitcoin ETFs, thanks in part to watch-sharing agreements with Coinbase.

Prior to this, the Cboe-operated BZX exchange chose Coinbase as the trading platform for its surveillance data sharing agreement.

In filings, Cboe said that Coinbase “constitutes a significant portion of US dollar-denominated bitcoin transactions.” Thus, she named the exchange as a partner for surveillance sharing agreements.

In June 2023, several companies re-applied to open a spot Bitcoin ETF. The hype came after investment giant BlackRock filed for a Bitcoin spot trust. Other organizations followed the foundation. In addition, applications to launch a spot bitcoin ETF, including Bitwise and Invesco, have been submitted.

However, the SEC called the application flow “inadequate”. Market participants, in turn, hastened to make adjustments to the documents in order to prove to the regulator the effectiveness and safety of the instrument. All applications are currently under review by the regulator.

At the same time, former head of the SEC Jay Clayton believes that the tool should be approved. According to him, it will be difficult for regulators to reject a spot bitcoin ETF if market participants who submit applications to the SEC to launch such an instrument can demonstrate its effectiveness.

So Why Did Ark Invest Sell Coinbase Shares?

Why are Wood and Coinbase executives selling shares if Coinbase is expected to perform well in the future, especially with potential SEC approvals?

Well, the simple answer is profit.

The company has faced some challenges due to the SEC lawsuit, causing uncertainty about its future. Now that the value of Coinbase stocks is rising, it makes sense to sell them for a profit whenever possible.

As mentioned earlier, both ARK Invest and Coinbase executives still hold significant amounts of shares in the company, so they’re not completely abandoning ship.

But the question remains: Why sell stocks only when good news arrives instead of staying for even more potential profits down the line?

Let us know your thoughts in the comments section.