According to reports, Cathie Wood’s Ark Invest sold 160,887 shares of crypto exchange Coinbase (COIN) for $13.5 million on Tuesday U.S. time. The investment company purchased Coinbase stock several times during the crypto winter. COIN underperformed both bitcoin and ether in 2022, and its shares fell 86% during the year.
Ark’s most recent acquisition of COIN was in early March, when the company paid $22 million for a total of 350,000 shares of Coinbase, including 301,437 shares for its ARK Innovation ETF (ARKK) and 52,525 shares for its Next Generation Internet ETF (ARKW).
COIN is up nearly 150% year to date and closed the Tuesday trading day in the United States at $83.99. However, the stock is still down 54% in the last year. It was listed at $342 in April 2021 and has only come close to exceeding that price at the bull market’s peak in November 2021. The investment firm recently announced raising $16 million for a new private crypto fund.
The founder and CEO of the investment management firm told Bloomberg TV on Tuesday that she has lost more than $2 billion due to stock sales during the market crisis. By selling the stock at a loss, Wood’s funds can reduce their losses and potentially offset the tax bill they may incur on future capital gains.
Cathie Wood explained that when her flagship fund fell from its peak in February 2021, its holdings were reduced from over 50 to only 28 stocks. During market downturns, selling stocks at a loss to offset a portfolio gain is a common way for investors to cushion the blow of a price decline.
Despite the fact that the ARK Innovation ETF is up 28.0% year-to-date, it is coming off its worst year ever, in which it fell 67.0% due to the Federal Reserve’s aggressive monetary policy to combat inflation. Wood has long been a critic of central bank policy, arguing that rate increases could increase the likelihood of a deflationary crisis.
Cathie Wood predicts an increase in institutional investors in crypto
According to Cathie Wood, Bitcoin’s value proposition is on full display amid the current banking crisis, which will “attract more institutions” to the BTC market over time. In a March 21 Bloomberg interview, Wood discussed BTC’s recent price increase, stating that its crisis-related price behavior “will attract more institutions.”
According to Oliver Linch, the CEO of Seattle-based crypto exchange Bittrex, institutional interest in Bitcoin may have already arrived. In a March 21 interview on The Wolf Of All Streets podcast, Linch noted that many large banks invested in cryptocurrencies long before the recent financial crisis.
The big talking point of this bear market is institutional interest in crypto. Every big bank now has a substantive crypto desk, not just for trading but also for partnerships.
Oliver Linch
As for the impact of institutional interest on Bitcoin’s price, Wood explained in the interview that the Investment’s $1-$1.5 million BTC price forecast for 2030 was based on an institutional investor BTC allocation analysis, which estimates that the majority of companies would allocate between 2.5% and 6.5% of their investment portfolios to BTC.
Source: Ark Invest – Bitcoin Price estimates
Following the failures of Silvergate, Silicon Valley Bank, and Signature banks, positive sentiment has surrounded Bitcoin. According to CoinGecko data, BTC has increased 43.6% since its most recent low on March 11, compared to a 25.3% increase in the broader crypto market during the same period.
