U.S. exchange-traded funds (ETFs), particularly ARK Invest, are reaping gains from their Coinbase holdings as the cryptocurrency exchange's shares surge past $270. ARK Invest, led by Cathie Wood, recently sold 199,526 Coinbase shares from its ETFs, marking a significant transaction in 2024.
The sale comprised 133,533 shares from the ARK Innovation ETF (ARKK), valued at approximately $35 million based on Coinbase's closing price of $262 on March 21. Additionally, ARK sold 59,215 shares from the ARK Next Generation Internet ETF (ARKW) and 6,778 shares from the ARK FinTech Innovation ETF (ARKF), totaling a sale worth $52.3 million based on the same closing prices.
Coinbase shares have witnessed steady growth, surpassing $270 for the first time since December 2021 and briefly reaching $276 on March 21. ARK's recent sale adds to previous significant transactions, including one on March 11 involving 270,365 Coinbase shares and another on February 16, where 499,149 COIN shares were sold.
The surge in Coinbase shares reflects a remarkable uptrend, with prices up nearly 250% over the past six months. ARK's divestment from Coinbase is part of its active portfolio management strategy, which also includes selling shares in Block, a fintech company focused on Bitcoin, co-founded by Twitter's Jack Dorsey.
On the same day as the Coinbase sale, ARK sold 188,519 Block shares from its ARKK fund, generating $15.8 million. Moreover, to comply with regulatory requirements, ARK sold 93,002 shares of Robinhood stock valued at around $2 million from its ARKW ETF. This move was necessary to maintain compliance with Rule 12d3-1, which limits ETFs from acquiring securities exceeding 5% of their total assets.
ARK's consistent divestment of Robinhood stock under Rule 12d3-1 showcases its adherence to regulatory guidelines. The company has previously executed similar transactions, such as selling 583,563 shares of Robinhood stock from the ARKK fund on March 14 without invoking the provisions of Rule 12d3-1.
