Is Cathie Wood Double Betting On Coinbase Even As It Faces Legal Trouble?

Key Takeaways:

• ARK Invest CEO Cathie Wood still considers Coinbase to be worth it.
• The company bought about $22 million in shares of COIN stock as of June 7, 2023.
• Wood considers the regulatory regime in the US to be hostile toward crypto.

YEREVAN (Conchapter.com) — Cathie Wood, CEO of ARK Invest, has a knack for unusual investing decisions. This running trend continues with her confident resolve to keep and buy Coinbase (COIN) stock even as the exchange faces its most brutal hour.

Let’s understand her sentiment and get to the bottom of this.

The Belief Doesn’t Waver

Interestingly enough, since Coinbase was hit with a grand lawsuit by the US Securities and Exchange Commission (SEC), different traders either backed out of the COIN stock or doubled their bets in a march of solidarity. And seemingly, ARK CEO Cathie Wood belongs to the latter.

As of June 6, 2023, ARK’s recent technicals demonstrate her faith in COIN.

Cathie Wood Remains Bullish on Coinbase

On June 7, ARK Invest bought 419,324 shares of Coinbase (COIN) stock ($53,26 each) which amounts to approximately $22 million. Even as the stock tumbled about 21%, this decision remains. However, the stock rebounded by a slim 4.2% on the same day.

Currently, ARK Invest is the fourth-largest holder of COIN shares. It has been propping it up for nearly a year despite the crypto market’s general volatility. Additionally, ARK owns a little more than 11 million shares in the company which, in turn, accounts for 6,08% of ownership.

Despite the slide in Coinbase shares, they are still up nearly 60% from their record low in December.

The Reasoning Behind Investing in Coinbase

In a recent Bloomberg interview, Cathie Wood explained why she still holds hold a positive approach when it comes to Coinbase. She expressed the opinion that while Coinbase is under regulatory scrutiny, it’s nothing compared to the charges that Binance faces.

Furthermore, she bets Binance may be forced out of the US market. Thanks to the heavy fraud-based allegations put up against it. That so-called ”ousting” can open the way for Coinbase’s further financial development. That “competitive elimination” logic is seemingly her main point in this instance.

Yet simultaneously, she recognizes the threat that the U.S. crypto ecosystem encounters. Moreover, she expresses surprise that the SEC chose to put Binance and Coinbase “in the same basket.” From her perspective, it’s incorrect to generalize two different legal situations.

Wood also noted that a “hostile” regulatory regime is present in the US, and that can halt crypto-based progress.

The Sum Of All

It’s quite reasonable to understand that Coinbase and Binance experience different levels of regulatory persecution.

Binance seems to face more severe problems than Coinbase by a long shot. However, it’s also important to recognize that the SEC might not be willing to differentiate between the exchanges properly.

In that case, it can chase crypto no matter the specifics, leading to an even bigger U.S. outflow than now. Lastly, boys and gals, be attentive and remember.

Don’t let the Fed catch you with your pants down!