ARK Invest CEO Cathie Wood says that she is bullish on top US crypto exchange Coinbase after the ruling in Ripple’s legal battle with the U.S. Securities and Exchange Commission (SEC). In a new Bloomberg interview, Wood says that while ARK decided to sell some Coinbase shares for profit-taking, she continues to have an optimistic […]
The post Cathie Wood Says ARK Invest Bullish on Coinbase After Ripple’s Victory in SEC Lawsuit appeared first on The Daily Hodl.
Just days after buying $21 million of Coinbase shares, ARK Invest CEO Cathie Wood has added another $19.9 million in Block Inc. shares across its ETFs.
ARK Invest CEO Cathie Wood doesn’t appear to have been swayed by recent crypto regulatory action, buying another $19.9 million shares of Block Inc. right after buying $21 million in Coinbase stock.
Wood’s latest buying spree comes despite the United States Securities and Exchange Commission this week suing two of the industry’s exchange heavyweights, Binance and Coinbase, for offering what the regulator considers to be unregistered securities, among other things.
Coinbase's share price has been depressed in the days following the SEC lawsuit, however, Block Inc.'s shares saw a sharp rise in that same time period.
ARK Invest’s 305,573 new shares of Block came across six buys between June 7-8, which now represents ARK’s fourth largest holding at 4.81%, according to ARK Invest Daily Trades.
Of the new shares, 240,174 were added to its ARK Innovation (ARKK) ETF, 39,099 shares to ARK Next Generation Internet (ARKW) and the remaining 26,300 shares to ARK Fintech Innovation (ARKF).
As for Coinbase, ARK Invest bought 419,324 shares — worth about $21.6 million — across three buys on June 6, which came in the midst of COIN plummeting nearly 20% overnight on June 5.
While many consider the lawsuits to have harmed the crypto firms, Wood recently told Bloomberg that the tougher charges laid against Binance may eventually work in Coinbase’s favor:
“We have Binance under increasing regulatory scrutiny for more criminal activities, fraud being one of them, therefore we have the competition for Coinbase disappearing, so that’s a good thing longer term for Coinbase.”
Coinbase is now ARK Invest’s seventh largest holding at 4.39%, with its total of 11,440 COIN shares spread across its ARKF, ARKK and ARKW ETFs, according to Cathie’s ARK, a website devoted to tracking her portfolio.
Since Q1, ARK Invest has increased the number of COIN shares by 8.2% — which comes on the back of 20.2% and 25.2% increases in Q4 2022 and Q1 this year, according to the website.
Because of regulatory uncertainty, innovation seems to be leaving the US for more friendly regimes. Unfortunate. I believe it will become an election-year issue. https://t.co/PvqK9W27Fd
— Cathie Wood (@CathieDWood) June 4, 2023
While Wood is becoming increasingly bullish on Coinbase, she believes the SEC’s regulation by enforcement approach has taken a toll on cryptocurrency innovators in the U.S.
Related: Bitcoin, Ether are ‘like gold’ says Cathie Wood, but Ray Dalio is skeptical
The tech-savvy CEO is ultra bullish on Bitcoin (BTC) over the long term too.
In the Bloomberg interview, Wood explained that Bitcoin was built to thrive during times of market turbulence and regulatory uncertainty:
“Why would Bitcoin do well in that circumstance? It will do well because it’s an antidote to counterparty risk in the traditional financial system.”
In April 2022, Wood predicted that Bitcoin would reach $1 million by 2030.
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Meanwhile, financial services firm Berenberg Capital told Cointelegraph that it viewed Coinbase shares as "uninvestable" in the near term.
Credit ratings agency Moody's has downgraded its rating of Coinbase from “stable” to “negative” following the SEC’s legal action against the crypto exchange for allegedly operating as an unregistered securities broker.
In a June 8 statement, Moody's said the downgrade was due to concerns about the impact of the SEC action on Coinbase’s day-to-day operations.
“The change in outlook to negative from stable reflects the uncertain magnitude of impact the SEC’s charges will have on Coinbase’s business model and cash flows.”
Despite the downgrade, Moody's noted that Coinbase maintains a “strong” liquidity position. The rating agency looked favorably on the company’s $5 billion in cash and equivalents compared to its $3.4 billion in long-term debt.
MOODY'S: COINBASE OUTLOOK TO NEGATIVE FROM STABLE.
— Breaking Market News (@financialjuice) June 8, 2023
The firm added that it expects Coinbase to maintain its “focus on expense management” that has successfully mitigated declines in transaction revenue in the past.
Related: Coinbase CEO’s stock sale was probably not planned to occur a day ahead of SEC suit
Moodys wasn’t alone in adjusting its outlook on Coinbase. While financial services firm Berenberg Capital reiterated its pre-existing “hold” rating to its clients, it slashed its price target for COIN shares from $55 to $39.
In emailed comments to Cointelegraph, Berenberg research analyst Mark Palmer explained that the reduction in the price target reflects their view that Coinbase could see its already-weak Q2 trading volumes “persist and intensify” as a result of the SEC’s charges, explaining:
"Given the potentially significant impact of the lawsuit's outcome on COIN's U.S. operations, we would expect some investors to reduce their exposure to its platform."
Additionally, Palmer noted the SEC's “desired remedy” would require the complete wind-down of COIN's core business practices, namely its staking services. As such, Palmer advised that investors should hold off on pursuing any investment in Coinbase shares in the short term.
“We view COIN shares as uninvestable in the near term.”
While Palmer says Coinbase is uninvestable, ARK Invest CEO Cathie Wood doesn’t seem too worried. In an interview with Bloomberg, Wood said the increasing regulatory scrutiny of competitor crypto exchange Binance was ultimately a good thing for Coinbase in the long run.
“They're very different.”
— Bloomberg Markets (@markets) June 8, 2023
Ark Invest CEO Cathie Wood says SEC seems to muddle the allegations against Coinbase and Binance https://t.co/nCvEp4jdfV pic.twitter.com/icbeIuLs1C
At the time of publication, Wood’s ARK Invest is the world’s fourth-largest holder of Coinbase shares and it shows no sign of giving up that title anytime soon. On June 7, the investment firm purchased an additional $21.6 million worth of COIN shares.
Coinbase shares have plummeted 15.7% since the beginning of the week, and are currently changings hands for $54.90 apiece, according to data from Google Finance.
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Cathie Wood’s ARK Invest is aggressively scooping up discounted Coinbase stock after the U.S. Securities and Exchange Commission (SEC) lawsuit against the firm sent shares tumbling. New data from Cathie’s Ark, which tracks the hedge fund’s trades, reveals three separate Coinbase (COIN) purchases on June 6th, totaling to about 419,000 shares worth more than $21 […]
The post Cathie Wood’s Ark Invest Aggressively Buys Coinbase Stock After SEC Lawsuit Hits Price appeared first on The Daily Hodl.
Coinbase (COIN) shares surged by more than 18% on Friday after the company’s chief executive, Brian Armstrong, said in an earnings call on Thursday that the exchange had a “turning point” quarter to kick off 2023. Armstrong notes that the company experienced 22% net revenue growth in 2023 Q1 compared to the final quarter of […]
The post Coinbase Shares Jump 18% After Brian Armstrong Says Exchange Had ‘Turning Point’ First Quarter appeared first on The Daily Hodl.
Cathie Wood’s ARK Invest is ramping up its acquisition of Coinbase (COIN) stock as the crypto exchange platform expands outside of the US. New data from Cathie’s Ark, a platform that tracks the investment of ARK Invest, reveals that the firm made three separate purchases of COIN on May 2nd that amounted to $7.35 million. […]
The post Cathie Wood’s ARK Invest Rapidly Accumulating Coinbase (COIN) Stock As Crypto Exchange Goes International appeared first on The Daily Hodl.
Cathie Wood’s ARK Invest added more than 157,000 Coinbase (COIN) shares this week as the top US crypto exchange goes on the offensive against the U.S. Securities and Exchange Commission (SEC). On Monday, three of ARK Invest’s funds made separate purchases of COIN shares worth a combined $6.98 million at time of writing. Coinbase shares […]
The post Cathie Wood’s ARK Invest Accumulates More Coinbase Stock (COIN) As Crypto Exchange Goes Against SEC appeared first on The Daily Hodl.
ARK Invest purchased 269,928 shares in Coinbase on March 23, only two days after it sold $13.5 million, its first sale of Coinbase shares this year.
Cathie Wood’s investment management firm has gone back to buying Coinbase shares again, just a day after COIN’s stock price dipped amid news of its Wells notice.
On March 23, ARK Invest purchased 268,928 Coinbase shares via its ARKK Innovation and ARKW Next Generation Internet exchange-traded funds. The shares wereworth $17.88 million at the time of writing.
Only two days prior, and before the news of the Wells notice broke, ARK Invest sold 160,887 Coinbase shares from its ARK Fintech Innovation ETF. The sale was the first time any of ARK Invest’s ETFs shed Coinbase shares in 2023.
Cathie Wood and Ark Invest's trade activity from today 3/23 pic.twitter.com/yyubxTegZj
— Ark Invest Daily (@ArkkDaily) March 24, 2023
Coinbase’s share price has failed to recover since it shared news it had received a Wells notice warning of possible enforcement action from the Securities and Exchange Commission, which led to COIN shares dropping around 21%.
Shares in Coinbase dipped to a low of $64.27 after trading began on March 23, and at time of writing were trading at $66.87 in after-hours trading, according to Barron’s.
Related: Coinbase CEO on its Wells notice: SEC is like soccer referees in a game of pickleball
Coinbase CEO Brian Armstrong had also sold shares in his firm between March 17 to March 20 — just days prior to the Wells notice and share price dip.
SEC filings indicate, however, that Coinbase executives and insiders all enter into 10B5-1 selling plans months in advance and that this tranche of sales was pursuant to a trading plan adopted on Aug. 16.
While the SEC reached a settlement with crypto exchange Kraken on Feb. 9 after alleging its staking services qualified as securities, Coinbase has repeatedly asserted that its staking products are fundamentally different from Kraken’s and they cannot be universally labeled as securities.
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A day after Coinbase received an SEC Wells notice, industry commentators weighed in on what recent regulator actions mean for America's crypto future.
The United States' crackdown on cryptocurrencies and firms will only serve to stifle crypto-related innovation and “weaken” the country, said industry pundits in the wake of Coinbase's recent Wells notice.
On March 22, crypto exchange Coinbase became the latest crypto firm to receive a “legal threat” — in the form of a Wells notice, just a month after stablecoin-issuer Paxos received its own in February. Some suggest there could be more to come.
Mati Greenspan, the chief of crypto research firm Quantum Economics said he believes U.S. regulators have been unfriendly to crypto “since the beginning.”
The recent collapses of crypto and startup-friendly banks, including Silvergate, Silicon Valley Bank (SVB) and Signature Bank have been viewed by some as being part of a scheme by regulators to un-bank the crypto sector, dubbed “Operation Choke Point 2.0.”
Meanwhile, a March 20 economic report from the White House turned into a scathing review of the merits of crypto assets, spending almost an entire chapter debunking its “touted” benefits.
Greenspan told Cointelegraph that the rumored action could be underway as crypto is seen as a “threat” to the U.S. dollar’s dominance in global trade — a major and long-standing benefit to the U.S.
Russia, China, and now crypto. Slowly but surely the United States is isolating itself from the global economy. The USD cannot remain the world's reserve currency for much longer under these conditions.
— Mati Greenspan (@MatiGreenspan) March 14, 2023
However, as more are beginning to use crypto for cross-border remittances globally, he warned a crackdown on crypto in the U.S. could actually have the opposite effect on the dollar:
“The surgical removal of cryptocurrencies from the U.S. banking system will only isolate the United States further and weaken the dollar's position as the global reserve currency.”
Adrian Przelozny, CEO of crypto exchange Independent Reserve told Cointelegraph the recent banking sector woes were not due to “any failure in crypto” but caused by banks managing their risks in an "irresponsible way.”
“The White House would be better served to review the practices in the banking industry,” he added.
Speaking about the most recent action against Coinbase, Przelozny said the “adversarial environment for the crypto industry” in the U.S. will push the related “jobs, investment and future innovation” offshore.
“Singapore, Hong Kong and potentially Australia” who are eyeing the benefits of the industry may prove a better home for it and those countries “will reap the economic benefits,” Przelozny said.
Related: Banks and the Fed have a problem — What about crypto?
The exact reasons the regulator is targeting Coinbase are still unclear. The SEC have declined to comment on the matter.
Investments in crypto asset securities can be exceptionally volatile & speculative, & the platforms where investors buy, sell, borrow/lend these securities may lack important protections for investors.
— U.S. Securities and Exchange Commission (@SECGov) March 23, 2023
@SEC_Investor_Ed to investors: exercise caution w/ crypto asset securities.
Michael Bacina, a lawyer and partner at Piper Alderman agreed that a “regulation by enforcement model” will “drive crypto-asset innovation offshore,” and added:
“This is a strange position to adopt given the losses many faced in the last 12 months arose from collapses involving unregulated offshore structures.”
Bacina said for years the industry has asked for clarity on how to comply. He pointed to the recent “telling” comments made by the judge in Voyager Digital’s bankruptcy case which “observed that there is no clear guidance from regulators.”
He added until governments lay out the path to regulatory compliance, offshore jurisdictions will continue to harbor crypto firms “which will cost jobs and raise the risk for consumers and investors.”
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Internet users in Russia have been targeted in an email campaign advertising the launch of an alleged cryptocurrency issued by the state. Potential victims are encouraged to follow a link to the website of the fraudulent investment scheme, security experts said. Thousands of Investment Offers Entice Russians to Put Money Into Non-Existent Cryptocurrency Fraudsters have […]