Cathie Wood adds to holdings in Coinbase, other crypto stocks amid FTX fallout
Cathie Wood’s Ark Invest is continuing to buy the dip in crypto stocks even as the fallout from the FTX collapse is creating new stresses in the digital currency world. The Ark Innovation ETF (ARKK) bought nearly 164,000 shares of Coinbase on Wednesday, while the Ark Fintech Innovation ETF (ARKF) added about 82,000 shares of Coinbase and bought roughly 141,000 shares of Silvergate Capital . Shares of Coinbase and Silvergate have dropped roughly 32% and 47%, respectively, since the end of October. These moves follow the Ark Next Generation Internet ETF (ARKW) buying shares of the Grayscale Bitcoin Trust on Monday and Tuesday. The trust is viewed by many as a proxy for the price of bitcoin, but it is currently trading well below the market value of the coins it holds. Ark’s purchases come as the stability of the crypto financial system has come into question on Wall Street, in Washington and among retail investors. The bankruptcy of FTX appears to be having major ripple effects throughout the industry . Gemini, Genesis and BlockFi have all announced restrictions on some services in recent days. BlockFi is on the verge of a potential bankruptcy filing, according to reporting from The Wall Street Journal . However, Ark Invest said in a newsletter earlier this week that its long-term belief in crypto is “not wavering.” Some expect that the demise of Bahamas-based FTX could be to the long-term benefit of U.S. firms that are more strictly regulated. Last week, Oppenheimer analyst Owen Lau reiterated an outperform rating on Coinbase and said the company “can take market share” from foreign players. Still, Lau cut the price target for the stock due to the decline in crypto prices and trading activity. Coinbase, which laid off workers earlier this year, reported a net loss of more than $500 million in the third quarter . Ark has made a habit of buying the dip this year but has continued to underperform. The flagship Ark Innovation ETF is down nearly 60% for the year. — CNBC’s Michael Bloom contributed to this report.
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