Ark Invest Sells Coinbase Shares

Ark Invest offloaded 13,780 Coinbase shares, valued at $3.9 million, from its Fintech Innovation ETF (ARKF) on Wednesday, amid a 10% drop in COIN’s price following the Federal Reserve’s hawkish stance.

This sale marks one of the most significant disposals of COIN stock for Cathie Wood’s investment firm since selling $2.8 million worth on September 23. Ark’s strategy typically prevents individual holdings from exceeding 10% of an ETF’s portfolio to maintain diversification, suggesting potential further rebalancing if COIN’s value fluctuates in relation to other fund holdings.

As per the latest disclosures, COIN constitutes 9.9% of ARKF, the second-largest holding after Spotify. The current market value of ARKF’s Coinbase holdings stands at around $110 million, with a year-to-date increase of approximately 54%.

Coinbase shares closed Wednesday at $279.86, down 10.2% for the day, yet are up 3.5% in pre-market trading, reflecting a 61% increase year-to-date, as reported by TradingView. Coinbase’s overall valuation is $52.1 billion, according to The Block’s data dashboard.

Market Reacts to Powell’s Hawkish Stance

The Federal Reserve announced a 25 basis points rate cut yesterday, as expected. However, Chair Jerome Powell’s subsequent speech adopted a hawkish tone, revising the 2025 rate reduction outlook from four cuts to just two, unsettling markets amid ongoing inflation concerns.

Bitcoin and the wider crypto market reacted to Powell’s remarks, experiencing an initial uptick post-Fed interest rate cut before falling approximately 9% from above $108,000 to below $100,000, now trading at $102,419, according to The Block’s Bitcoin Price Page.

Powell’s reemphasis on the Fed’s inability to own Bitcoin without Congressional approval has been perceived as a hindrance to President-elect Donald Trump’s bitcoin reserve strategy. Trump’s plan involves directing the U.S. Treasury to purchase one million bitcoins over five years, not the Fed.

Despite bearish market sentiment, U.S. spot Bitcoin ETF inflows remained robust, adding $275.3 million on Wednesday and extending a 15-day positive streak totaling over $6.7 billion. Ethereum ETFs also saw net inflows of $2.5 million, marking an 18-day positive trend totaling nearly $2.5 billion, as per The Block’s data.

Meanwhile, the GMCI 30 index, monitoring the top 30 cryptocurrencies, plunged over 15% post-FOMC press conference, dropping to 188.07 before bouncing back to 200.30.

Fournier anticipates heightened volatility ahead as markets adjust to rising expectations for Trump’s presidency. Despite short-term challenges, the longer-term outlook remains bullish.