On Tuesday, the US Security and Exchange Commission (SEC) took the listed crypto exchange Coinbase to court. Investors reacted and COIN’s price fell by almost 20 percent. But big buyers seem quick to step in to pick up the stock at a discount.
SEC is suing Coinbase
On Monday, the SEC sued crypto exchange Binance. Less than 24 hours later, it was Coinbase’s turn. The SEC alleges that Coinbase is illegally trading securities without a license. However, the crypto markets do not seem to be impressed for the time being. The Bitcoin (BTC) price has recovered sharply since the news was announced.
Investors in the Coinbase share (COIN) did not react positively as expected. On Monday, COIN closed around $58. It opened slightly above $47 on Tuesday, but quickly recovered and closed slightly below $52 on Tuesday; an increase of almost 10 percent.
ARK stocks COIN shares
Trading volume on Tuesday was also remarkably high. With spacious 56 million dollar, this was the highest trading volume since November 22 last year. ARK Invest, a huge US investment fund, had a large share of this trading volume. Cathie Woods’ fund bought 419,324 COIN shares with a total value of $ 21.6 million.
This is no surprise. ARK Invest is a major investor in COIN. In total, the fund owns 11.44 million COIN shares with a total value of $590 million. ARK is therefore clearly taking advantage of the sharp drop in price and thus expresses confidence in the share. The total market capitalization of COIN is $13.77 billion. ARK therefore owns more than 4 percent of all Coinbase shares.
On April 14, 2021, in retrospect marking a local top in the Bitcoin bull run, Coinbase made its initial public offering. Currently, COIN is trading 88 percent below its historic high of $435. But ARK Invest appears to be optimistic about the stock’s future, despite the SEC’s indictment.