Ark Invest said Coinbase is poised to benefit from the crash of rival exchange FTX despite near-term weak sentiment in the crypto space, as the fund group recently resumed buying the stock for its largest ETF.
While FTX’s fall, and the subsequent arrest Monday of its founder, could delay certain developments in the space, Ark Research Director Frank Downing said during a webinar, Coinbase is set to thrive once regulatory clarity in the segment comes.
“We think that over the medium to long term, while the industry is set back now, Coinbase really will be a share gainer here as momentum and trust flows away from this kind of frontier in the international world to the more trusted, more regulated exchanges,” he said.
Unlike FTX, Downing added, Coinbase — as the largest publicly-traded crypto exchange in the US — produces quarterly financial statements and auditing firm Deloitte certifies that its assets are backed one-to-one.
“In an environment of tighter regulations, Coinbase’s standing could prove as a moat compared to some of its less regulated counterparts,” he said.
Buying more COIN
Ark Invest has eight ETFs trading in the US with combined assets of roughly $12.4 billion, according to ETF.com. Its largest ETF upped its position in Coinbase last week as centralized exchanges seek to offer more transparency in the wake of FTX פיילינג פֿאַר באַנקראָט.
The fund manager bought 78,982 shares of Coinbase for its Ark Innovation ETF (ARKK) — a position that represented nearly 0.05% of the fund.
Coinbase’s stock price — down about 84% year to date — was down about 9% Tuesday, as of 4:00 pm ET, setting a new low for the shares since the firm’s 2021 listing on the Nasdaq.
ARKK has nearly $7.7 billion in assets under management. The ETF is down about 64% year to date and down about 9% over the past month.
Coinbase stock made up 3.53% of ARKK, as of Tuesday — ranking 14th-highest of the ETF’s 31 holdings. The Coinbase shares in the fund have a market value of roughly $250 million.
אַן אַרק ינוועסט ספּאָוקספּערסאַן האט נישט גלייך צוריק אַ בקשה פֿאַר קאָמענטאַר.
Owen Lau, an executive director at Oppenheimer & Co., told Blockworks that the overall sentiment for Coinbase is weak after the collapse of FTX. But he likened that sentiment to those felt by financial giants such as Goldman Sachs and Morgan Stanley after the collapse of Lehman Brothers.
“It was actually a good time to buy the industry leaders,” Lau added. “It took time for these stocks to recover, and further downside risk is still uncertain, but Ark has a long investment horizon which could take advantage of the situation here for Coinbase.”
אין שפּעט יולי, אַרק ינוועסט סאָלד אַוועק בעערעך 1.4 מיליאָן שאַרעס פון קאָינבאַסע, ווערט וועגן $79 מיליאָן אין דער צייט. די סעק האט פּונקט קלאַסאַפייד נייַן קאָינבאַסע-ליסטעד טאָקענס ווי סיקיוראַטיז אין אַ קלאָג אַלעדזשינג אַז אַ ערשטע קאָינבאַסע פּראָדוקט פאַרוואַלטער און מענטשן נאָענט צו אים געניצט קלאַסאַפייד אינפֿאָרמאַציע פֿאַר ינסיידער טריידינג.
The following month, Ark Invest analyst Yassine Elmandjra said the company was bullish on Coinbase, noting that the crypto exchange’s שוטפעס מיט BlackRock could be a catalyst for bitcoin’s price to rise by up to $500,000.
On Nov. 8 and 9 combined — as news was circulating about FTX’s “liquidity crunch” and Binance’s potential buyout of the exchange — Ark Invest bought nearly 540,000 shares of Coinbase for ARKK. Crypto stocks, including Coinbase, האט געפלאמט amid the developments.
FTX פיילד פֿאַר באַנקראָט on Nov. 11. A week later, on Nov. 18, Ark reported buying 255,000 more Coinbase shares for ARKK.
Exchanges seek transparency after FTX debacle
Ark Invest’s latest buy of Coinbase shares comes as rival exchanges have looked to offer more transparency in the wake of FTX’s crash.
קאָינסבאַסע טשיף סעקוריטי אָפיציר פיליפוס מארטין האָט געזאָגט אַ 25 נאוועמבער בלאָג פּאָסטן that it was the only crypto company “providing the transparency and assurance of a public company financial audit.” He added that Coinbase was exploring more crypto-native methods to proving reserves and unveiled a $500,000 דעוועלאָפּער שענקען פּראָגראַם צו ינסענטיוויז אנדערע צו טאָן די זעלבע.
“For tomorrow we are working toward a decentralized system where you don’t have to trust us, or any institution,” Martin said at the time.
באַקומען די שפּיץ קריפּטאָ נייַעס און ינסייץ פון דעם טאָג איבערגעגעבן צו דיין ינבאָקס יעדער אָוונט. אַבאָנירן צו די פריי נוזלעטער פון Blockworks איצט.
קענען ניט וואַרטן? באַקומען אונדזער נייַעס די פאַסטאַסט וועג מעגלעך. באַהעפטן אונדז אויף טעלעגראַם.
Source: https://blockworks.co/news/ark-invest-ftx-opportunity-for-coinbase