Ark Invest capitalized on August 5’s massive market meltdown by purchasing Coinbase (COIN) shares for the first time in several months. Cathie Wood’s investment company acquired $17.8 million worth of Coinbase stock, marking its initial acquisition since June 6, 2023, when it invested nearly $21.6 million.
This purchase came as COIN dropped 7.3% to $189.47 amid a market-wide sell-off that resulted in massive losses in crypto and global stock markets. The crypto firm’s shares are currently trading at $189, a level last seen about five months ago.
ARK Invest Aggressively Buys The Dip
Ark Invest mostly acquires shares during price drops, with the strategy of selling them once the prices recover.
The company looks to maintain a balanced portfolio, guaranteeing no single holding surpasses 10% of any of its exchange-traded funds (ETFs).
This move has resulted in massive sales of COIN in recent months.
Post-purchase, COIN now represents a significant 8.55% of ARK’s Innovation ETF (ARKK), 9.72% of its Fintech Innovation ETF (ARKF), and 6.73% of its Next Generation Internet fund (ARKW).
As previously stated, Bank of America (BAC) recently upgraded its rating on Coinbase shares from underperform to neutral, increasing its price target for Coinbase to $217 from $110. Apart from Bank of America, investment banking company KBW also increased its Coinbase price target.
In a research analysis, KBW increased its Coinbase price target from $160 to $230 while maintaining its market performance rating.
In that context, ARK Invest also made other notable acquisitions during the August 5 drop, including 176,963 shares of Amazon (AMZN) worth $28.5 million and 12,426 Tesla (TSLA) shares valued at $2.5 million.
Furthermore, Ark Invest acquired 12,545 shares of Meta (META) valued at $5.96 million, 681,885 shares of Robinhood (HOOD) for $11.12 million, 52,239 shares of Palantir (PLTR) for $1.26 million, and 25,316 shares of AMD (AMD) amounting to $3.4 million.
The Crypto Market Is In Turmoil
ARK’s return to buying came amid uncertainty in the general crypto sector. On August 5, Bitcoin dropped to $50,000, marking its lowest level since February 2024. On that note, many other major cryptos also suffered huge losses.
Binance Coin (BNB), Ethereum (ETH), Solana (SOL), and Cardano (ADA) all lost over 15% within a day.
As reported previously, the digital asset investment products recorded outflows reaching around $528 million within a week, marking the first drop in four weeks.
The outflow is thought to be a direct response to mounting worries over a possible recession in the United States, compounded by geopolitical uncertainties and consequent massive liquidations across different asset classes.
The Bank of Japan’s (BOJ) decision to raise interest rates for the first time in the past 17 years because of the concerns over Yen’s buying power decline against the United States dollar triggered a ripple effect within risk-on asset markets, causing panic and widespread sell-offs.
Moreover, increasing tensions in the Middle East, specifically between Israel and several neighboring nations, have added to the current market unease, with fears of more escalation prompting authorities in the concerned countries to implement precautionary measures.
Nonetheless, analysts and enthusiasts still believe that the crypto market will recover in the coming months, which is pushing most of them to buy the dip aiming to boost their profits.
