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. This sale occurred amid a 10% drop in COIN's price, following The Federal Reserve's more hawkish stance.

This marks one of the firm's most significant stock sales since disposing of $2.8 million worth of COIN on September 23. Ark's investment strategy typically seeks to prevent individual holdings from exceeding 10% of an ETF's portfolio to maintain diversification.

As of December 18, COIN constitutes 9.9% of ARKF, making it the second-largest holding, just behind Spotify. ARKF's total Coinbase investments are valued around $110 million, with the fund up approximately 54% year-to-date.

As of Wednesday's market close, Coinbase shares traded at $279.86, down 10.2% for the day, but showed a 3.5% increase in pre-market trading. Year-to-date, Coinbase has gained over 61%, making its valuation approximately $52.1 billion.

Market Reaction to Powell's Speech

The Federal Reserve recently announced a 25 basis points rate cut, but Chair Jerome Powell's hawkish remarks affected market sentiment, leading to a reduction in expected rate cuts for 2025 from four to two. This unexpected change unsettled markets amid ongoing inflation concerns.

In reaction, Bitcoin and the broader crypto market initially rose post-rate cut but then fell sharply—Bitcoin dropped about 9% from over $108,000 to below $100,000, currently trading at $102,419.

Powell's remarks also reiterated that the Fed cannot own Bitcoin without Congress's approval, which may influence President-elect Donald Trump's proposal for a strategic Bitcoin reserve. Despite the bearish trend, U.S. Bitcoin and Ethereum spot ETF inflows remained strong, adding $275.3 million and $2.5 million, respectively.

The GMCI 30 index, which tracks the top 30 cryptocurrencies, suffered a decline of over 15% but subsequently recovered. Analysts anticipate increased volatility as markets adjust to expectations surrounding Trump's presidency, yet maintain a long-term bullish perspective.