Ark Cashes in Chips: Cathie Wood’s Fund Offloads $74M in Coinbase and Bitcoin Trust

Cathie Wood’s Ark Investment Management continued offloading shares of prominent crypto companies Coinbase Global Inc. (COIN) and Grayscale Bitcoin Trust (GBTC) last week.

The firm sold $59 million worth of Coinbase stock and $15 million in GBTC across three of its exchange-traded funds (ETFs) – Ark Innovation ETF (ARKK), Ark Next Generation Internet ETF (ARKW), and Ark Fintech Innovation ETF (ARKF).

Keypoints

• Cathie Wood’s Ark Invest sold $59 million worth of Coinbase (COIN) shares and $15 million worth of Grayscale Bitcoin Trust (GBTC) shares last week, continuing a selling spree
• Ark sold the shares as prices for both hit new 52-week highs, suggesting a strategy of profit-taking amidst current crypto market optimism
• Ark’s funds have now outperformed the Nasdaq 100 index as they capitalize on gains from individual assets like COIN and GBTC
• GBTC’s shrinking discount to net asset value likely triggered Ark’s exit; the discount recently hit its narrowest point since July 2021
• Broader crypto market volatility, including Bitcoin ending an 8-week growth streak, may have influenced Ark’s decisions to sell and lock in profits

This extends Ark’s recent strategy of profit-taking in the wake of mounting optimism and growth in crypto markets. Both COIN and GBTC notched 52-week highs last week, with COIN closing Friday at $147.90 – up 4.5% weekly, 50% monthly, and over 300% year-to-date. GBTC closed at $34.10 after adding nearly 2% for the week and surging 315% for 2022.

Ark’s timely sales enable locking in substantial profits from the rallies. They also allow rebalancing its funds’ exposures amidst the shifting crypto landscape. The funds are now outperforming the Nasdaq 100 benchmark as Ark capitalizes on running up individual assets like COIN and GBTC.

????Ark Invest’s selling round-up from last week.

• @CathieDWood’s company offloaded a total of $58.8M in #Coinbase shares during the last seven days
• @ARKInvest also sold just under $15M worth of $GBTC for the same period as an addition to their recent selling policy pic.twitter.com/yFBPXCTBEf

— CryptoPotato Official (@Crypto_Potato) December 18, 2023

What’s driving the COIN liquidation? Ark raked in $58.8 million selling Coinbase stock just last week, adding to the $100 million sold the previous week. This riding of the rally echoes Ark’s strategy with Tesla and other tech high-flyers – letting winners run before rotating profits into other emerging bets.

The calculus for GBTC is slightly different. Ark offloaded over $14 million here as shrinking discounts to net asset value made the Bitcoin trust less attractive. GBTC’s once-massive 44% NAV discount has narrowed dramatically, hitting just 7.4% in mid-December – its lowest since July 2021. This signals fading advantages vis-a-vis direct Bitcoin ownership.

Broader uncertainty for crypto markets may also spoon-feed Ark’s decisions to cash out. While digital assets posted a buoyant multi-week run, Bitcoin dipped nearly 5% last week – interrupting 8 consecutive positive weeks. This taste of turbulence as the Fed asserts an aggressive stance likely informs Ark’s profit-preservation moves. The firm trimmed exposure ahead of time to hedge portfolios against any resurgent crypto winter.

Ultimately crypto remains a key component of Ark’s long-term vision for disruptive innovation and technologies like blockchain. But Wood also recognizes crypto’s volatility and secures gains when prudent. Selling into rallies allows re-allocation to other high-conviction picks across genomics, fintech, robotics, and Ark’s other targeted domains. Maintaining nimbleness and locking in crypto profits when apt keeps Ark poised to capitalize on emerging opportunities however markets trend.

In one sentence, Cathie Wood’s Ark Investment extended its crypto selling spree last week, offloading $59 million in Coinbase stock and $15 million in Grayscale Bitcoin Trust amidst record highs to capitalize on soaring prices and shift exposures based on narrowing discounts and sector volatility.