High-growth investor Cathie Wood is increasing her fund’s stake in
Coinbase
after the crypto exchange was sued by the Securities and Exchange Commission this week.
ARK Invest funds added more than 400,000 shares of Coinbase (ticker: COIN), it said in an email on Tuesday. The stock has dropped about 20% after SEC lawsuits were made public against Coinbase and Binance, another exchange that isn’t publicly traded. Coinbase is still up more than 40% this year, and shares were up 2% in premarket trading Wednesday.
Wood’s funds are the second-biggest holder of Coinbase. The SEC is accusing exchange of acting unlawfully as an exchange, broker and clearing agency of crypto assets. Coinbase now faces a big threat to its revenue, according to Berenberg analyst Mark Palmer.
However, ARK is betting that the exchange will bounce back. The recent purchases—spread across the
ARK Innovation ETF
(ARKK), Next Generation Internet ETF (ARKW), and Fintech Innovation ETF (ARKF)—bring its stake to 11.44 million shares, or about $590 million.
The investment comes after ARK missed out on
Nvidia’s
(NVDA) recent rally, fueled by the hype around artificial intelligence. It sold its stake in the chip maker in November, before it rallied more than 160% this year to briefly become the first semiconductor company to touch a $1 trillion market capitalization.
Write to Brian Swint at [email protected]
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