ARK Invest sold about $3.9 million of Coinbase (COIN) shares from its Fintech Innovation ETF (ARKF) on Dec. 18. The move came after the exchange’s stock price dropped 10% and Federal Reserve Chairman Jerome Powell shocked the market by saying the Fed would be cautious about future rate cuts.
The sale marks ARK Invest’s largest transaction since Sept. 23, when the firm sold $2.8 million worth of COIN shares.
COIN is ARKF's second largest holding
According to the information recently disclosed by the investment company led by Cathie Wood, COIN is the largest holding of ARKF. As of December 18, the weight of COIN in the fund was 9.9%. At the same time, the fund's largest holding is Shopify.
Cathie Wood and ARK Invest’s Trading Activity (12/18)
— Ark Invest Daily (@ArkkDaily) December 19, 2024
One of ARK Invest's strategies is to ensure that no single stock accounts for more than 10% of the portfolio to maintain diversification. Although the sale may simply be a rebalancing of ARKF's holdings, the move came after Powell announced a 0.25% rate cut.
Rate cuts are usually good for risky asset classes such as crypto assets, but Powell's speech yesterday surprised the market with bearish rhetoric. He said the Fed will be cautious about future rate cuts, adding that there may only be two rate cuts next year. This led to a plunge in cryptocurrency prices and crypto stocks.
According to Google Finance data, COIN stock price fell by more than 10% in a single day.
ARK Invest's ARKF ETF is up more than 53% year-to-date
According to the fund's official website, ARKF has risen more than 53% this year. Since its inception, the fund has returned more than 7% in total.
ARKF’s other major holdings include Block Inc.’s 6.14%, Robinhood’s 5.21%, SoFi Technologies’ 4.52%, and Roblox Corp.’s 3.57%.
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