decrypt.co
There’s been no better time this year to take profits on Coinbase shares.
As of this writing, COIN shares—which trade on the Nasdaq—are sitting at $128.46. That’s the highest Coinbase has seen its shares trading all year, beating the previous high of $110.15 the company set in July after a ruling in favor of Ripple spurred optimism that Coinbase would be successful in its own SEC lawsuit.
The current highs also bring the San Francisco-based crypto exchange’s shares level with prices it last saw in May 2022. But the stock is still far short of its all-time high of $342.98. Unsurprisingly, that peak was seen during the November 2021 bull run when the global crypto market cap reached $3 trillion.
The stock's performance has tended to follow broader volatility within the cryptocurrency market and associated businesses. When Coinbase first went public, market analysts largely agreed that the company's stock would function as a proxy bet on crypto. When crypto prices were up, COIN would benefit. When prices were down, COIN would likewise suffer.
In broad strokes, over the last year and a half, those predictions have generally held true. But more recently COIN has greatly outperformed the industry’s two main assets, Bitcoin and Ethereum. Coinbase stock has gained 72% in the past month and has come close to tripling the $33.60 price it was at in January 2023.
As of Tuesday afternoon, Bitcoin had reclaimed $38,000, according to CoinGecko, for the first time since last Friday. Ethereum is currently trading for $2,063. It has receded slightly from the yearly high it set on November 9 after news broke that BlackRock was preparing a filing for an Ethereum ETF. Coinbase is among the companies eagerly waiting for news on Bitcoin and Ethereum spot ETF decisions. It's set to be the custodian or surveillance partner for a number of issuers, most notably BlackRock.
All that bullish price action on COIN has made this an opportune time for Cathie Wood’s Ark Invest to take some profits and rebalance its ETF holdings.
Wood’s Florida-based asset management firm just sold $5.3 million worth of its Coinbase holdings and bought approximately $1.2 million worth of Robinhood shares. COIN and HOOD now account for 13% and 4% of the firm’s ARK Fintech Innovation ETF portfolio, respectively. It's not an unusual move for Wood.
Ark has routinely bought and sold COIN shares throughout the year, hedging bets along the way. Just last month, Wood's firm sold $5.8 million in Coinbase and Grayscale Bitcoin Trust shares. In mid-July, the firm sold $26 million worth of Coinbase shares, just after buying $21 million in shares earlier that same month. It followed similar strategies in June, March, and February of this year.
Meanwhile, Robinhood—the stock trading platform with a crypto-friendly approach—has seen its shares track closer to the traditional stock market.
Ark Invest has previously added Robinhood shares to its ARK Next Generation Internet fund. Robinhood's stock price stood at $8.57 at the time of writing, up 2% from yesterday but down 6% for the month. The shares are trading about 16% above their all-time low, reflecting a broader cooling of tech stocks after a big boom earlier this year from the rapid growth of artificial intelligence.