The market is currently in a state of total chaos, but Cathie Wood’s Ark Invest doesn’t care. In fact, they seem to want to take advantage of it with an investment in Coinbase. In total bought it on November 9, 237,765 COIN shares for approximately $12.1 million.
The one are dead
We can safely apply the proverb “one man’s death is another’s bread” on this transaction. After the fall of FTX, they started calculating at Ark Invest and very quickly realized that this could be good for Coinbase. In the short term, this mainly causes problems for the industry, but in the long term, of course, extra customers will come to Coinbase.
The day after the scandal, Coinbase also published a blog post, stating it has minimal exposure to FTX. In total, it is about 15 million dollars, which were with FTX to facilitate the business operations and trade of users.
Furthermore, Coinbase indicates that it has no exposure to the FTX Token (FTT), which has lost more than 80 percent of its value since the problems at the exchange platform. Binance announced on November 7 that it would liquidate all its FTX Tokens and that ultimately proved fatal to the exchange platform.
Wood bought the dip
Wood’s purchase was made after Coinbase plunged another 10 percent on Nov. 8. That was the market’s reaction to the news at FTX, which the market believes is also negatively impacting Coinbase. The declines in crypto prices, among other things, contributed to the red numbers at Coinbase, but also the reputational damage for the industry.
It is also striking that earlier this year Wood sold millions of dollars worth of Coinbase shares. This happened in July 2022 in response to the US Securities and Exchange Commission (SEC) investigation. There were rumors of possible insider trading by Coinbase employees.
Things are not going really great with Coinbase at the moment. On November 10, it still had to show 60 employees the door. “Today’s layoffs were surgical. We’re trying to make sure we don’t waste a dollar,” thus Coinbase CFO Alesia Haas.