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Cathie Wood’s ARK Innovation ETF (ARKK) came roaring back in January, notching a partial bounceback from its tumultuous time in 2022.
Shares of the exchange traded fund closed out the month at $39.93, a near 28% increase from the end of December, marking its best monthly performance since launching in 2014.
The expressed goal of Wood’s Innovation ETF is to capture growth from forms of technology that could potentially change the world. But after a high-flying increase of 154% in 2020, the fund’s market price slipped 24% in 2021, and then cratered 60% amid a tightening economy last year.
While it holds a significant amount of stock in companies like Tesla and Zoom, the basket of tech firms also holds millions of shares of cryptocurrency exchange Coinbase. The San Francisco-based crypto company accounts for a 4.5% slice of the fund, a position worth $347 million.
ARKK’s Coinbase holdings grew last year despite the chills of crypto winter, according to Cathie’s Ark, a website that tracks its holdings. Ark Invest hit the buy button 24 times last year, netting around 2.7 million shares in the exchange, even after selling over a million shares in July.
Ark Invest first began adding Coinbase to its innovation fund in October 2021, months after the exchange’s initial public offering. The investment house also holds Coinbase stock in its Fintech Innovation ETF and Next Generation Internet ETF, which contains $70 million worth of shares in Grayscale’s Bitcoin Trust as well.
Wood recently acknowledged how hard Coinbase’s stock price has been hit by the collapse of its former competitor FTX, stating its value had “depreciated in response to the fallout across crypto markets.”
But Coinbase’s stock price had been hobbled long before that. Since reaching a high of $368 per share in November 2021–when digital assets prices were much higher–Coinbase’s stock price has fallen over 84% to $57.94, as of this writing.
However, a recent rally in the price of Bitcoin and Ethereum has brought about higher prices for Coinbase’s stock as well. While Bitcoin is up 38.5% on the year and Ethereum has increased 31.4% so far, shares of the exchange have surged 72.5% since beginning the trading year at $33.60.
And even though there’s been some short-term pain, Wood believes the implosion of FTX will ultimately be a boon for Coinbase, enabling the business to grow.
“Coinbase will become the premier regulatory compliant on-ramp for crypto and will take significant share now that one of its major competitors has gone bankrupt,” she wrote.