ARK Invests Cathie Wood is famous for her support of innovative technologies and fresh ideas. The veteran money manager has created a suite of exchange traded funds that track the latest and greatest developments in tech, from A.I. and robotics to 3D printing and genomics. But Wood is perhaps best known for her long-running support of cryptocurrencies, and particularly Bitcoin. In February, ARK Invest even predicted Bitcoin could rise to nearly $1.5 million by 2030 due to increasing institutional adoption of cryptocurrencies.
On Tuesday, Wood doubled down on her bullish crypto stance, picking up nearly 420,000 shares of Coinbase stock as it plummeted 11.4% after the Securities and Exchange Commission sued the crypto exchange, alleging that it has operated as a broker, securities exchange, and clearing agency without proper registration.
Gurbir S. Grewal, director of the SECs division of enforcement, said in a statement following the lawsuit announcement that Coinbases executives had knowingly offered unregistered securities to investors. You simply cant ignore the rules because you dont like them or because youd prefer different ones: The consequences for the investing public are far too great, he added in a rebuke of the firm.
While unwelcome for executives at Coinbase, the SEC lawsuit wasnt necessarily a surprise. Less than three months ago the crypto exchange was given whats called a Wells Notice by regulatorsa document that informs firms that theyre under investigation. And CEO Brian Armstrong was quick to fire back at the SEC after the announcement, saying his team is confident in our facts and the law and hes proud to represent the industry in court to finally get some clarity around crypto rules in a Tuesday tweet.
Cathie Wood wasnt phased by the lawsuit either. Her Tuesday purchases were worth more than $20 million as of Tuesdays closing price and were split between three actively traded ETFs. The flagship Ark Innovation ETF added nearly 330,000 shares, while Ark Next Generation Internet ETF and Ark Fintech Innovation ETF, bought roughly 53,900 and 35,700 shares, respectively.
Woods flagship fund now holds 8.3 million shares of Coinbase worth over $430 million. While the ARK Fintech Innovation ETF holds nearly 1.4 million shares, worth over $70 million, and the ARK Next Generation Internet ETF holds 1.7 million, worth over $85 million. Coinbase stock recovered nearly 3% by midday Wednesday.
Woods vote of confidence in Coinbase comes during trying times for the crypto community. Binance, the worlds leading crypto exchange by volume, was also sued by the SEC this week. The regulator alleges the exchange mishandled company funds and had a blatant disregard of the federal securities laws.
But even before cryptos latest troubles, Wood was adding to her holdings in Coinbase due to her faith in cryptocurrencys long-term potential. In January, she picked up roughly 330,000 shares of the company, then proceeded to buy more than 700,000 shares in February, and then another roughly 560,000 shares in March, splitting the purchases between her flagship ARK Innovation ETF, the Next Generation Internet ETF, and the Ark Fintech Innovation ETF.
