Ark Invest, an asset management company led by Cathie Wood, made a massive overhaul to its portfolio this week by selling leading crypto exchange stocks. The company reduced its holdings to Coinbase Global Inc and Robinhood Markets Inc, two companies offering digital asset trading services. This move was taken amid rising Bitcoin and other cryptocurrencies that had a positive impact on the company's shares.
According to data from the Ark Invest website, the company sold a total of 216,035 Coinbase shares worth about US$43.4 million (approximately Rp681.3 billion) over the past week. The sale was made despite Coinbase's share price rising 18.5% during that period, from 173.55 US dollars on February 25 to US$205.77 on March 1. Coinbase is the largest crypto exchange in the US to have more than 73 million verified users and trading volume of more than US$2 trillion in 2023.
Apart from Coinbase, Ark Invest also sold 548,619 Robinhood shares worth about $8.6 million over the past week. The sale comes despite Robinhood's share price up 10.9% during that period, from USD 14.16 on February 25 to USD 15.71 on March 1. Robinhood is an online brokerage firm offering share trading services, options, ETF, and non-commissioned crypto services. The company has more than USD 31 million active users and a crypto trading volume of more than USD 11 billion in the fourth quarter of 2023.
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Ark Invest's decision to sell most of Coinbase and Robinhood's shares suggests a change in crypto investment strategy from the company. Ark Invest is known as one of the main supporters of crypto innovation and has several ETFs (exchange-traded funds) focused on disruptive technology, including Next Generation Internet ETF (ARKW) and Innovation ETF (ARKK). Both of these ETFs have a crypto allocation of about 5% and 3% of their total assets.
However, it appears that Ark Invest is adjusting its portfolio to a growing trend in the crypto market. One of these trends is the increasing demand for more environmentally friendly cryptocurrencies, such as Ethereum, Cardano, and Solana, which use a more energy efficient proof-of-stake (PoS) consensus mechanism than Bitcoin which uses proof-of-work (PoW). Based on information from CoinGape, Ark Invest has added shares of PoS crypto-related companies, such as Grayscale Ethereum Trust (ETHE) and Bitwise 10 Crypto Index Fund (BITW), to its ETF.
In addition, Ark Invest is also considered to be anticipating a potential drop in Coinbase and Robinhood's share prices in the future. The two companies face stiff competition from other companies that offer similar services, such as Kraken, Gemini, eToro, SoFi, and Public. In addition, both are also at risk of being negatively affected by regulatory and legal changes that could limit crypto trading activities in the US.
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