In a surprising twist, Ark Invest has sold off its Bitcoin ETF shares and bought more than 41,000 COIN shares as the market faces unhealthy consolidation led by BTC and ETH.
Ark Invest has made a notable purchase in the cryptocurrency space. The asset manager purchased 41,032 Coinbase shares valued at $8.7 million. According to a report, the purchase is for its Next Generation Internet exchange-traded fund (ARKW).
The Ark Invest Portfolio Rebalancing
Ark Invest also dumped $8.6 million of its spot Bitcoin (BTC) as the broader crypto space continues in a huge sell-off. The move remains significant as it is Ark’s first purchase of Coinbase shares for its fund.
According to communication from the firm, COIN now ranks as the sixth-largest holding within its ARKW fund. As of February 25, its weighting of 5.5% is worth approximately $94.4 million. According to The Block’s data, Coinbase’s value is around $39.5 billion.
Interestingly, Ark Invest does not allow any individual holding to own more than 10% of a fund’s portfolio. The goal is to maintain diversification within its funds. This standing principle implies that Ark would likely keep rebalancing its weightings for every rise in Coinbase stocks.
Currently, ARKB remains the top allocation within its Next Generation Internet fund. Its current weighting is 10.7%, worth about $182.2 million. Others in the top five positions of ARKW include Tesla, Roku, Roblox, and Robinhood.
Ark acquired $2.2 million worth of COIN on October 8, while the crypto market rode on bullish sentiments preceding Donald Trump’s presidential election. Coinbase later witnessed double growth in its stock, which hit a new all-time high of $343.62 as of December 2024.
Similarly, Bitcoin registered a 76% growth from less than $65,000 to a peak of $109,000 on Inauguration Day.
However, those remarkable gains made by COIN and BTC have been wiped out due to the ongoing market slump. COIN and BTC have plunged by about 38% and 19%, respectively, worsened by the broader crypto price decline.
ETF Outflows and Ark’s Bitcoin Sell-Off
Meanwhile, Ark also sold shares valued at $8.6 million of its spot Bitcoin ETF, ARKB. This gives a total of 98,060 shares. The last time Ark sold its spot Bitcoin ETF was in September 2024. On that occasion, the investment manager sold off 44,609 ARKB shares valued at $2.8 million as of then.
Since launching in January 2024, Ark’s spot Bitcoin ETF has raked in $2.7 billion in cumulative inflows while its assets under management stand at $4.7 billion.
This development comes as the ETF market has recorded six consecutive days of outflows since February 18. According to Farside Investors data, the net outflow on February 25 was the highest at $937.7 million.
Market leaders BlackRock’s IBIT and Fidelity’s FBTC contributed the highest outflows with $164.4 million and $344.7 million, respectively.
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