Even though the crypto industry is going through its umpteenth rout, things continue progressing nicely. ARK, the firm led by Cathie Wood, has doubled down on its purchasing of Coinbase stock. A curious decision, given the looming crackdown on crypto staking in the US.
Coinbase is one of the most prominent publicly-traded cryptocurrency companies. Their exchange and wallet service is used by millions of people worldwide. Moreover, the platform provides various other services, including learn-and-earn, crypto staking, etc. That staking aspect may come under SEC scrutiny after the recent kerfuffle involving Kraken. CEO Brian Armstrong claims he is willing to fight the matter in court if need be.
Whether those comments influence the decision by ARK to buy Coinbase stock remains unknown. However, the firm continues to buy COIN shares. It is uncertain why they would put so many eggs in the same basket, as many other crypto-related firms with stocks exist. However, one could argue that COIN is highly undervalued and offers some future profit potential.
It almost feels like ages ago when COIN was valued near $200. Unfortunately, the stock has fallen on hard times and currently trades below $60. That isn’t abnormal, as 2022 was brutal for many publicly-traded companies. However, traditional firms bounced back much quicker than crypto firms or crypto assets. COIN dipped to $32 not too long ago, and the recent uptrend also seems to reverse.
Even so, Cathie Wood’s ARK continues to scoop up Coinbase stock. The outfit had stopped doing so for almost a month, but business is back to normal. Data indicates ARK acquired over 162,000 shares of the company at a near $9.2 million valuation. That purchase puts the company at roughly 9.3 million shares in Coinbase, behind The Vanguard Group at nearly 13 million shares.
Despite the bullish signal by ARK, other investors don’t seem too excited about the crypto firm. Its price action remains incredibly volatile and leans toward a further price drop. Much will depend on the firm’s Q4 2022 earnings report, which should be made public around February 21, 2023.
In addition, it is crucial to remember these shares do not entitle holders to dividends. Coinbase has never issued dividends and has seemingly no intention of ever doing so.