Cathie Wood’s ARK adds $12.1M in Coinbase shares amid turbulent markets

November 11, 2022 Coin Telegraph

<div>Cathie Wood's ARK adds .1M in Coinbase shares amid turbulent markets</div>

Ark Investments topped up its Coinbase stock shortly after FTX's liquidity issues were revealed, which came after Coinbase stated that it had “minimal exposure” to the troubled trading platform.

Amid the FTX and crypto market chaos, Cathie Wood-led Ark Investments has increased its Coinbase (COIN) holdings with a purchase of 237,675 COIN shares worth about $12.1 million on Nov. 9.

Of the 237,675 COIN shares, Ark Investment Management added 207,527 shares to its ARK Innovation ETF (ARKK), 22,416 shares to its ARK Next Generation Internet ETF (ARKW), and another 7,732 shares to its ARK Fintech Innovation ETF (ARKF).

The tech-focused investment firm’s purchase came after Coinbase stated in response to FTX’s liquidity crisis that it has “minimal exposure” to the now cash-strapped cryptocurrency trading platform with only $15 million on deposit to “facilitate business operations and customer trades.”

Coinbase also added that it has no exposure to FTX’s native token FTT — which has fallen 84.08% since Binance announced its decision to liquidate its entire FTT holdings late on Nov. 7 — and its partner trading firm Alameda Research.

Wood’s Nov. 9 purchase came following a 10.84% fall in COIN’s share price on Nov. 8, which was an expected result follow on from the FTX controversy, according to Owen Lau, a stock analyst at investment banking firm Oppenheimer:

“While COIN has minimal exposure to FTX, before there is enough evidence that the contagion risk is contained, the pressure on crypto prices will likely weigh on COIN.”

It was also the investment firm’s first trade for Coinbase since it sold off over 1.4 million COIN shares — which were then worth $75 million — across ARKK, ARKF and ARKW on Jul. 26. 2022.

The large sell-off came in response to the U.S. Securities Exchange Commission (SEC) conducting an investigation into allegations of Coinbase engaging in the insider trading of unregistered securities.

However, Wood’s latest buying spree has brought the firm’s COIN shares tally back up to 7.625 million, which is about one million shares less than its peak of 8.675 million recorded on Jul. 20. 2022, according to data from Cathie’s Ark.

Coinbase now has the 11th largest holdings in Ark’s main investment fund ARKK, which now represents 3.79% of the portfolio.

COIN’s stock went up 10.74% on Thursday, increasing its share price to $50.92, according to Yahoo Finance.

Bitcoin price volatility hits 2021 high as one analyst paints $15,000 target

May 26, 2021 Coin Telegraph

Bitcoin price volatility hits 2021 high as one analyst paints ,000 target

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Wild price fluctuations are likely in the top two cryptocurrencies as both record a dramatic spike in their 30-day realized volatility charts.

The current cryptocurrency market scenario is only for traders who have an extremely high appetite for risks. But for the faint of heart, analysts advise patience and caution ahead.

The outlook stands tall for Bitcoin (BTC) and Ether (ETH), the top cryptocurrencies by market capitalization that more or less behave as locomotives for the rest of the crypto market. As of Wednesday, the ETH/USD Realized Volatility on a 30-day timeframe has reached near its 2017 peak levels, according to data provided by Skew.

*Bitcoin and Ether 30-day realized volatility reaches 2021 high. Source: Bybt.com, Skew*

Meanwhile, Bybt.com shows Bitcoin’s 30-day volatility at its yearly high, suggesting that the benchmark asset remains at risk of wild price fluctuations in the sessions ahead. Simply put, the top two crypto assets show a likelihood of moving in either direction with a higher degree of volatility. All in all, that could mean both aggressive gains and losses for daytraders.

Buying in a falling market

The volatility alarm rings at the time when both Bitcoin and Ether have posted incredible recovery rallies, following their recent price declines. In retrospect, the BTC/USD exchange rate plunged more than 50% after topping near $65,000 in April — a correction partially driven by Elon Musk’s anti-Bitcoin tweets and China’s crypto ban reiteration last week.

Ether, whose positive correlation efficiency with Bitcoin currently sits near 0.88, tailed the benchmark digital asset’s bearish correction. The second-largest cryptocurrency experienced a maximum of 60% decline in its market valuation — compared to its record high of $4,380 from mid-April.

But bulls saw opportunities in the said price dips, insomuch that they helped Bitcoin and Ether prices recover by up to 36.12% and 68.52% from their local price bottoms, respectively. Some analysts anticipated that the upside retracement would extend further based on supportive macroeconomic catalysts, mainly inflation fears.

Tech bull Cathie Wood, who heads Ark Investment Management, reiterated her $500,000 Bitcoin price target after last week’s crash, calling the dip “a really great time to buy.”

Ark's Cathie Wood is sticking with her $500,000 target for Bitcoin #TheBusinessweek https://t.co/9eBp5M39Zi pic.twitter.com/VeSRF5fplm
— Businessweek (@BW) May 19, 2021

Nevertheless, many also cautioned traders against buying during a bearish correction phase, especially after a year-long price rally that increases the risks of profit-taking by long-term investors. Analysts at BiotechValley Insights Consulting Group noted that Bitcoin dropped hard even after the United States Consumer Price Index rose to 4.2%, stating that the crypto market is now going through an “anxiety stage.”

“I believe Bitcoin has a long way to fall from here,” one of the BiotechValley analysts wrote in a note. “I think it will slowly grind down the slope of hope with a periodic dead cat bounce.”

The group called for a $15,000–$16,000 price target for Bitcoin.

Lower risk-appetite? Just wait

Koroush AK, an independent market analyst, took a rather middle approach. He advised traders to wait for a clear bounce above short-term resistance levels before determining their market bias, tweeting:

“After a 60%+ market crash, it’ll take more than a small bounce for me to shift bias back to bull market bullish. Cautious until we capture $45,000 BTC and $3,400 ETH. [I] will be patient here. Don’t need to catch exact bottoms or sell exact tops to make money.”

The recent rebound has coincided with an increase in the number of outstanding Bitcoin Futures contracts from $11 billion to $11.88 billion, showcasing a steady climb in leveraged positions in the derivatives market. Meanwhile, more than $12 billion worth of long positions has been liquidated since the May 19 price crash.

Ark Invest and JPMorgan expect Bitcoin to hit $130K–$470K

April 6, 2021 Coin Telegraph

Ark Invest and JPMorgan expect Bitcoin to hit 0K–0K

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Top funds in the U.S. expect Bitcoin to hit anywhere between $130K to half a million dollars in the long term.

JPMorgan Chase expects Bitcoin (BTC) to reach $130,000, while Ark Invest anticipates the market valuation of BTC to surpass that of gold.

The optimistic macro prediction from both funds revolves around the scarcity of Bitcoin, which has buoyed its popularity as a safe-haven asset.

*BTC/USD 1-day price chart (Binance). Source: TradingView*

Why are both high-profile funds so optimistic about Bitcoin?

As Cointelegraph previously reported , the outlook of the U.S. dollar index is on the decline.

The fear of inflation and the increasing liquidity in the financial markets is causing reserve currencies, like the dollar, to depreciate.

Ark Invest, as an example, sees Bitcoin nearing $500,000 in the future, considering that the fund expects it to surpass gold by market capitalization. Currently, the market cap of Bitcoin is roughly 10% of gold.

BREAKING: Ark Invest believes #Bitcoin’s market capitalization will one day “comfortably eclipse” that of gold, and exceed $10 trillion
— Market Meditations (@MrktMeditations) April 5, 2021

The Winklevoss twins, who own over a billion dollars worth of cryptocurrencies like Bitcoin, outlined a similar thesis in the past.

In the new popular essay entitled "The Case for $500K Bitcoin," Tyler Winklevoss, co-founder of Gemini, said:

"Today, the market capitalization of above-ground gold is conservatively $9 trillion. If we are right about using a gold framework to value bitcoin, and bitcoin continues on this path, then the bull case scenario for bitcoin is that it is undervalued by a multiple of 45. Said differently, the price of bitcoin could appreciate 45x from where it is today, which means we could see a price of $500,000 U.S. dollars per bitcoin."

Meanwhile, JPMorgan has set a more conservative target at $130,000, which is more realistic as a shorter-term target for Bitcoin, as it would put BTC's valuation at around $2.73 trillion.

Holger Zschaepitz, market analyst at Welt, noted:

"JPMorgan sets $130k #Bitcoin target BUT the long-term risk-adjusted Bitcoin theoretical fair value of $130,000 would drop to between $24,000 and $30,000 based on current volatility ratios. Upside potential conditional on volatility of Bitcoin converging to that of gold. (via BBG)"

However, Zschaepitz noted that the long-term risk-adjusted price of Bitcoin could fall in the future, which is not accurately predictable because it is difficult to forecast the trend of volatility over time.

What do traders think?

According to a pseudonymous trader known as Bitcoin Jack, the spent output profit ratio (SOPR) indicator forecasts some profit-taking could occur in the short term.

The SOPR indicator gauges how much BTC in the market is in profit and, thus, vulnerable to a sell-off. The trader said:

"Pretty much filled out all specific area of interest on the volume profile to be ready for trend confirmation Trend confirmation expected soon, otherwise I think we will reset to another corrective structure that will last >1-2 weeks aSOPR indicates little profit taking ahead."

Fellow cryptocurrency trader Scott Melker emphasized that Bitcoin has performed well against the S&P 500 and the U.S. stock market, which still makes it favorable as a store of value.

Melker wrote:

"$BTC Vs. $SPX. Most assets have 'risen' in value because the denominator is USD, which is depreciating. When you look at stocks vs. a deflationary asset, they look far less impressive."

As long as Bitcoin continues to outperform the U.S. stock market, from a risk standpoint, it would remain compelling for both retail traders and high-net-worth investors in the near to medium term.

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