Markets

Ark Invest is betting on Coinbase stock despite the challenging outlook

Ark Invest has been buying Coinbase shares for two consecutive days, with Cathie Wood pile up About $16 million in total.

Wood is known for its investments in disruptive technologies such as blockchain. Since Coinbase is a digital asset exchange, it has attracted significant investment from Wood’s asset management company, Ark Invest.

Cathie Wood’s Ark Invest is betting big on Coinbase stock

Ark Invest bought more than $8 million worth of COIN shares on Monday through its three exchange-traded funds (ETFs). Wood’s allocation to the various ETFs was as follows:

  • 129,604 shares of $6.4 million for the Ark Innovation ETF
  • 23,456 shares, valued at $1.1 million, for the Ark Next Generation Internet ETF
  • 15,809 shares valued at $790,000 in the Fintech Innovation ETF.

Then, on Tuesday, I invested $7.5 million in Coinbase stock with the following allocation:

  • 112,949 shares of $5.8 million in favor of the Ark Innovation ETF
  • 20,313 shares, valued at $1 million, for the Ark Next Generation Internet ETF
  • 13,875 shares worth $712,000 in the Fintech Innovation ETF

Brian Armstrong throws his money bag

Ark Invest placed a COIN bet despite the fact that Brian Armstrong, the co-founder of Coinbase, sold 59,460 shares worth more than $3.5 million in the last month.

Coinbase is grappling with the Securities and Exchange Commission (SEC) over a notice Wells received regarding the sale of unregistered securities. Furthermore, the company wants regulatory clarification from the Securities and Exchange Commission (SEC) for the crypto asset class.

Analyst Daniel Sereda Believes Legal battles are expensive and a drawn-out lawsuit could worsen Armstrong’s financial situation.

I assume that the number of shares outstanding will continue to rise steadily as the company continues to incur losses and has to finance itself somehow.

Daniel Sereda

Coinbase is also considering moving abroad, where it may also have to deal with competitive challenges. So the question remains: Is Armstrong funding the battlefield fund by getting rid of counterinsurgency stocks?

25% negative?

On the weekly timeframe, COIN is supportive around $50. The same range is also the neckline of the double top pattern.

If COIN gives a weekly close below $50, it could lead to a double top collapse. Sereda writes, “COIN stock is likely to decline to previous supportive lows in the $35-40 per share range, which is less than 25% from current levels.”

Coinbase chart. source: TradingView

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