Buying the Dip: Cathy Wood’s Ark Investments Buys $21.6M Worth of Coinbase’s Coin Amid SEC Lawsuit

Cathy Wood’s Ark Investment Management has doubled its bullish stance on Coinbase, the largest cryptocurrency exchange in the US. The investment management firm has bought another pile of Coinbase (COIN) stock following a drop in value due to the recent SEC lawsuit against the exchange.

Recall that the US Securities and Exchange Commission (SEC) sued Coinbase on Tuesday, alleging that the firm failed to register as a national securities exchange, clearing agency and broker, despite having performed all functions. The commission also accused the company of failing to register its steak-as-a-service product and violating federal securities laws.

The SEC’s case against Coinbase comes less than 24 hours after the agency launched enforcement action against Binance, the world’s largest crypto exchange. Among the thirteen charges unveiled against the firm were allegations of self-dealing, market manipulation and securities law violations.

Arc Invest Buys Coin Worth $21.6 Million

After the Coinbase lawsuit, the price of COIN plummeted. At the end of US trading hours on Tuesday, the stock had fallen more than 13%, closing the trading day at $51.61.

According to trading activity from Arc Invest on Tuesday, the company bought 419,324 shares of Coinbase worth $21.6 million. The investment firm divided the purchases among ARK Innovation ETF, ARK Next Generation ETF and ARK Fintech Innovation ETF.

Trading activity from Cathy Wood and Arch Invest today 6/6 pic.twitter.com/5np2GcZkWi

— Ark Invest Daily (@ArkkDaily) June 7, 2023

The latest acquisition brings ARK’s total COIN holdings to 11.44 million shares, valued at approximately $590 million.

Ark’s Past Coin Purchases

Arc Invest has a track record of buying COIN dips emerging from market conditions and regulatory issues. In early May, the investment firm bought 168,869 Coinbase stock worth about $8.5 million after shares plunged 6.8% amid news of a class-action lawsuit alleging the exchange violated privacy laws.

ARK acquired 304,300 COIN worth $17.5 million in April after buying 2.4 million shares for $117 million the previous month. The company also conducted several rounds of COIN purchases in February and January.

Meanwhile, Arch Invest sold thousands of Coinbase shares after a series of purchases in March. On March 21, the firm dumped 160,887 COIN stocks worth $13.5 million. ARK’s consistent COIN purchases show that Wood is unrelenting in his bullish support for the exchange.