Cathie Wood Shows Confidence in Coinbase Amidst SEC Lawsuit

In a bold move that reflects her unwavering faith in Coinbase, Cathie Wood, the CEO of ARK Invest, recently snapped up an additional $21 million worth of Coinbase stock. This surprising development comes in the midst of regulatory actions taken by the United States Securities and Exchange Commission (SEC) against leading crypto exchanges, including Coinbase and Binance, both accused of offering unregistered securities and other violations.

While the SEC’s lawsuits have put pressure on Coinbase’s share price. Nonetheless, undeterred by the legal storm, Wood seized the opportunity to purchase 419,324 shares of Coinbase on June 6, with a total value of approximately $21.6 million. Interestingly, this buying spree coincided with a significant overnight dip of nearly 20% in COIN’s value on June 5.

Cathie Wood Explains the Rationale Behind the Coinbase Move

In a recent interview with Bloomberg, Wood shared her insightful perspective on the situation, suggesting that the more severe regulatory charges leveled against Binance could actually work in Coinbase’s favor. With Binance facing increasing regulatory scrutiny, including allegations of criminal activities and fraud, Wood pointed out that this development might result in reduced competition for Coinbase in the long run, ultimately benefiting the exchange.

The latest acquisition firmly establishes Coinbase as ARK Invest’s seventh-largest holding, comprising 4.39% of their investment portfolio. According to Cathie’s ARK, a dedicated website that tracks Wood’s investments, ARK Invest currently holds a total of 11,440 COIN shares across its ARKF, ARKK, and ARKW ETFs.

Impressively, this purchase marks an 8.2% increase in ARK Invest’s COIN shares since the first quarter. Furthermore, the company’s conviction in Coinbase is evident from the substantial increases of 20.2% and 25.2% in Q4 2022 and Q1 this year, respectively.

While Wood remains bullish on Coinbase, she criticizes the SEC’s regulatory approach, which she believes has taken a toll on cryptocurrency innovators within the United States. Nevertheless, her recent investment underscores her belief in Coinbase’s ability to navigate these challenges successfully and emerge stronger.