Ark Invest, led by “Queen of Stocks” Cathie Wood, added to its positions in Coinbase, Circle, and Robinhood on Monday, buying about $6.6 million worth of shares across the three companies. It also trimmed its position in crypto exchange Bullish by about $2.3 million. The market interpreted the moves as bargain hunting ahead of earnings season. (Previously: Morgan Stanley downgrades Coinbase! Cuts price target by 53% to $120, sees recovery stalling) (Background: Robinhood plunges 23%! ARK buys the dip with $9.1 million as crypto revenue falls 55% year over year)
Ark Invest, led by “Queen of Stocks” Cathie Wood, disclosed its latest round of trades on Monday (November 2), adding to its positions in crypto-related stocks Coinbase, Circle, and Robinhood, while trimming its position in crypto exchange Bullish.
According to Ark Invest’s daily transaction disclosures, the firm bought 24,790 shares of Coinbase (COIN) through its three actively managed ETFs, ARKK, ARKW, and ARKF, worth approximately $3.4 million based on the closing price that day. Coinbase closed Monday at $137.83, down 3.98%. In the same round of trades, Ark bought 35,657 shares of Circle (CRCL), worth approximately $2.6 million; the stock edged down 0.63% that day. It also added 7,703 shares of Robinhood (HOOD), worth approximately $645,800, and the stock closed down 1.35%. The three purchases totaled approximately $6.6 million.
Meanwhile, Ark sold 104,172 shares of Bullish (BLSH), worth approximately $2.3 million. At the day’s closing price of $22.54, Bullish plunged 5.69% in a single day, making it one of the worst performers among these crypto-related stocks. All three stocks Ark bought weakened in tandem, while the one it sold fell the most.
Adding to positions ahead of earnings season: Coinbase profits surge, with Circle next up on Wednesday
The timing of Ark’s latest round of purchases came just after Coinbase reported its third-quarter earnings.
According to Coinbase’s third-quarter filing with the U.S. Securities and Exchange Commission (SEC), the company’s net income surged 66% year over year to $719 million last quarter, up from $433 million in the same period last year. Revenue totaled $1.22 billion, roughly unchanged from the previous quarter but down 35% year over year. Annualized revenue from its prediction markets business topped $200 million for the first time, doubling from about $100 million the previous quarter and making it one of the company’s fastest-growing product lines.
After the earnings were released, Bernstein analysts noted that growth in Coinbase’s prediction markets and its two major revenue engines—subscriptions and services—“offset weaker crypto trading activity.”
Next, Circle will report its third-quarter earnings on November 4. According to analyst estimates compiled by TradingView, the consensus is for quarterly revenue of $788 million and earnings per share of $0.37. Robinhood reported ahead of the others last week, with crypto-related revenue rising 20% from the previous quarter to $120 million, offsetting the shortfall from declining crypto trading revenue. Bullish is expected to report its third-quarter results on November 18.
Market impact and what to watch next
Viewed in the context of this year, Ark has repeatedly bought crypto-related stocks in stages during pullbacks, and this time was no exception. The difference is that Bullish, the stock it sold, is in the exchange sector, while the three stocks it bought are more focused on “crypto infrastructure and brokerage.” Their revenue sources are relatively diversified, leaving them less dependent on any single bet on crypto prices.
Looking back at Ark’s earlier moves, it trimmed its Circle position when the stock surged after its listing, and now it has taken advantage of the pullback to buy back shares. Taken together, these moves suggest that its long-term view of Circle has not changed; only its entry price has.
There are three things to watch next:
1.
Circle’s earnings on Wednesday are the first test: whether revenue meets the $788 million consensus will directly determine whether Ark’s latest purchase was made near the relative low or halfway up the climb.
2.
Can the stocks stabilize? Whether these crypto-related stocks can find their footing after earnings week will be key. Coinbase was just downgraded by Morgan Stanley, which cut its price target by more than half; whether the stock can hold its recent low will be a barometer of market sentiment.
3.
Direction of capital rotation: If Ark’s rotation—“selling exchange stocks and buying brokerage and infrastructure stocks”—continues, it would suggest that institutional exposure to the crypto industry is shifting away from trading fees toward more stable revenue streams. This shift is also worth watching for similarly listed fintech and brokerage stocks.