Strategic Investments Amid Market Downturn

In the wake of a significant market slump on Monday, ARK Invest, spearheaded by Cathie Wood, capitalized on the downturn to initiate its first acquisitions in months of Coinbase (COIN) and Robinhood (HOOD) shares.

Notable Purchases and Historical Context

ARK Invest strategically acquired $17.8 million worth of Coinbase stock, marking its first procurement of the crypto exchange’s shares since June 6, 2023, when it secured $21.6 million worth. Concurrently, the investment management firm augmented its holdings with $11.2 million in shares of the crypto-friendly online brokerage Robinhood, the first purchase of HOOD shares since February 13.

Market Performance and Tactical Approach

On the day of the acquisition, COIN experienced a 7.3% decline, closing at $189.47, amidst a broader market sell-off that saw both crypto and global stock markets endure one of their steepest declines in recent history. Similarly, HOOD shares fell by 8.17%, settling at $16.42.

ARK Invest is known for bolstering its portfolio during price dips, with an eye on future appreciation. The firm strategically avoids allowing any single holding to exceed a 10% weighting in any of its exchange-traded funds (ETFs), a policy that has prompted significant selling of COIN in recent months.

Impact on ARK’s ETF Holdings

Following Monday’s transactions, Coinbase now constitutes 8.55% of ARK’s Innovation ETF (ARKK), 6.73% of its Next Generation Internet fund (ARKW), and 9.72% of its Fintech Innovation ETF (ARKF).