On July 17, Cathie Wood’s Ark Invest took notable action in the cryptocurrency market by divesting a considerable number of shares in Coinbase. This decision coincided with Coinbase’s stock witnessing a remarkable surge subsequent to a recent court ruling pertaining to the Ripple case.
According to reports, Ark Innovation ETF (ARKK), Ark Next Generation Internet ETF (ARKW), and Ark Fintech Innovation ETF (ARKF) collectively sold 248,838 shares of Coinbase, amounting to a value of $26.3 million based on Monday’s closing price of $105.5 per share.
It marks the third time in recent days that Ark Invest has sold off its holdings in the exchange. Ark CEO and CIO Cathie Wood explained that the sales were primarily aimed at taking profits and reallocating capital to other areas.
However, Wood emphasized that Ark Invest remains optimistic about the exchange, particularly in light of the recent court ruling favoring Ripple in its legal battle against the SEC.
The ruling determined that Ripple’s XRP token is not a security. Experts, including Cathie Wood and analysts from JPMorgan, believe this ruling could also have implications for the 13 tokens actively traded on Coinbase that the SEC has alleged to be securities.
According to CNN data, despite the recent sales, Ark Invest remains the second-largest owner of Coinbase, holding more than a 6% stake. The favorable court ruling in the Ripple case has also caught the attention of Barclays, which sees it as incrementally positive for the exchange.
Implications Of Ripple’s Partial Victory For Coinbase
The British banking giant believes that the ruling clarifies the securities status of certain tokens and could de-risk regulatory pressure on the exchange. However, Barclays maintained its underweight rating on Coinbase stock with a $70 price target, citing few positive drivers in the near term.
While J.P. Morgan and Needham share a more positive sentiment toward the exchange, investment bank Berenberg has cautioned that the recent rally in Coinbase’s shares may be overdone, suggesting that some investors may have misunderstood the implications of the XRP ruling.
Nevertheless, as the crypto market continues to navigate regulatory challenges, the landscape remains dynamic, with market participants closely monitoring legal developments and their potential impact on key players like Coinbase.