Ark Invest Offloads $3.9 Million In Coinbase Shares Amid Fed’s Hawkish Remarks
In the latest development, Ark Invest sold 13,780 Coinbase shares worth $3.9 million from its Fintech Innovation ETF (ARKF) on Wednesday after the Fed’s hawkish stance caused Coinbase’s price to drop 10%.
Coinbase is one of the companies with the largest stock sales
This is one of the largest sales of Coinbase shares since Ark Invest sold $2.8 million worth on September 23. The overall goal of Ark’s strategy is to prevent any single stock from accounting for more than 10% of the ETF’s portfolio to ensure diversification, which means they will likely continue to adjust their holdings based on Coinbase’s performance.
As of December 18, Coinbase was the second-largest holding in Ark Invest’s ARKF ETF, accounting for 9.9% of the fund, behind Spotify. ARKF’s Coinbase stock holdings are worth about $110 million, and the fund has risen 54% this year.
Recently, the Federal Reserve announced a 25 basis point interest rate cut yesterday, in line with market expectations. However, Chairman Jerome Powell’s subsequent speech introduced a hawkish tone, lowering the prospect of rate cuts in 2025 from four to just two. This unexpected turn has unnerved markets despite signs of stable inflation in recent months.
Coinbase’s shares closed at $279.86 on Wednesday, down 10.2% on the day. Bitcoin and the broader market also reacted to Powell’s hawkish stance. Before Powell’s speech, Bitcoin fell about 9% from above $108,000 and briefly fell below $100,000 before recovering. It is currently trading at $100,470, down more than 3% in the past 24 hours.
The market reacted to Jerome Powell’s statement that the Federal Reserve cannot own Bitcoin without congressional approval, viewing it as a roadblock to Trump’s Bitcoin plans. However, Trump’s plan, along with a bill introduced by Senator Cynthia Lummis, aims to have the U.S. Treasury, not the Federal Reserve, purchase 1 million Bitcoins over five years.
Despite bearish market sentiment, the U.S. spot Bitcoin ETF saw strong inflows, adding $275.3 million on Wednesday and extending the winning streak to 15 days, totaling more than $6.7 billion. The U.S. Spot Ethereum ETF also saw inflows, adding $2.5 million and extending the streak to 18 days, with inflows totaling nearly $2.5 billion.
Looking ahead, volatility is expected to increase as expectations rise for Donald Trump’s inauguration as president. Still, despite the short-term turmoil, the long-term outlook remains bullish.
