ARK trims Coinbase stake again, rotates into Bullish as crypto weakness drags on ETFs
Cathie Wood’s ARK Invest has extended its recent pivot within crypto‑related holdings, unloading another sizable block of Coinbase shares while deepening its bet on digital asset platform Bullish across several of its exchange-traded funds.
On Friday, ARK sold a total of 134,472 shares of Coinbase Global, equivalent to roughly 22.1 million dollars at the time of the trades. The disposals were spread across three of the firm’s flagship innovation funds:
– 92,737 COIN shares exited the ARK Innovation ETF (ARKK)
– 32,790 shares were sold from the Next Generation Internet ETF (ARKW)
– 8,945 shares left the Fintech Innovation ETF (ARKF)
The move continues a clear reversal in ARK’s stance on Coinbase. Just one day earlier, the firm had already offloaded 119,236 COIN shares, worth about 17.4 million dollars, marking its first sale of Coinbase in 2026 and the first reduction since August 2025, after a brief period of renewed buying earlier in the week. The back‑to‑back disposals signal a more decisive shift away from the stock rather than simple day‑to‑day portfolio fine‑tuning.
The latest trimming came against an unusual backdrop: Coinbase’s share price actually rallied sharply during Friday’s session. The stock closed near 165 dollars, gaining about 13 percent on the day. Despite that jump, Coinbase remains under pressure in a broader sense, down roughly 26 percent year‑to‑date according to market data. That disconnect — selling into strength despite a short‑term bounce — suggests ARK’s decision is driven less by short‑term price action and more by a reassessment of Coinbase’s role and risk profile in the portfolio.
At the same time as it was cutting Coinbase, ARK was building a larger position in Bullish, a digital asset trading and technology platform that has become an increasingly visible name in the listed crypto‑equities universe. Across the same three ETFs, ARK purchased a combined 393,057 Bullish shares worth about 10.7 million dollars, broken down as follows:
– 278,619 Bullish shares added to ARKK
– 70,655 shares bought for ARKW
– 43,783 shares accumulated in ARKF
Bullish’s stock ended the day around 27 dollars, up approximately 10 percent in that session. However, on a year‑to‑date basis, the shares have fallen about 27 percent, mirroring the kind of drawdowns seen across many crypto‑sensitive equities. The company’s fundamentals are also under scrutiny: in the fourth quarter of 2025, Bullish reported a net loss of 563.6 million dollars, or 3.73 dollars per diluted share, a sharp reversal from the 158.5 million‑dollar profit it posted in the same quarter a year earlier.
Beyond the crypto names, ARK continued to shuffle other growth holdings. The firm increased positions in large‑cap and high‑growth innovation plays such as Alphabet, Recursion Pharmaceuticals and Tempus AI. At the same time, it trimmed several high‑beta technology stocks including Roku, The Trade Desk and PagerDuty. The pattern underscores an effort to recalibrate risk, lighten up on some of the more volatile or richly valued names, and reallocate capital toward companies that ARK believes better align with its long‑term innovation themes.
The rebalancing comes after a difficult period for ARK’s ETFs, many of which are heavily exposed to digital asset‑linked companies. A pronounced pullback in crypto markets during the fourth quarter weighed notably on returns in funds like ARKK, ARKW and ARKF. In its latest quarterly commentary, ARK pointed specifically to weakness in Coinbase and other digital asset‑related holdings as a key headwind for performance.
Coinbase, in particular, suffered a deeper drawdown than the underlying crypto assets it helps investors trade. In the aftermath of a major liquidation event in October, trading volumes on centralized exchanges fell about 9 percent quarter‑over‑quarter. With activity subdued, Coinbase’s stock dropped nearly 35 percent from October through the end of the year, underperforming both Bitcoin and Ether over the same period. For an active manager like ARK, this divergence raises the question of whether exchange equities still offer the best risk‑adjusted way to capture crypto’s long‑term upside.
What this shift signals about ARK’s crypto strategy
ARK’s latest trades suggest not a wholesale retreat from the digital asset ecosystem, but a reconfiguration of how it wants that exposure expressed. By selling into a rallying Coinbase while buying a beaten‑down Bullish, ARK appears to be:
– Locking in gains and reducing single‑stock risk in a name that has become closely correlated with trading volumes and regulatory news flow
– Rotating into a different crypto platform where it may see greater upside relative to recent price declines, or business models less constrained by U.S. exchange dynamics
– Maintaining a meaningful presence in the sector while diversifying the types of companies through which it participates
Investors tracking ARK’s moves should recognize that such rotations are typical of the firm’s style. ARK is known for high‑conviction bets but is also willing to adjust when valuations move quickly or when the balance between risk and reward shifts for a particular stock. In this context, trimming Coinbase after a rebound and adding to Bullish following a steep YTD fall is consistent with a valuation‑sensitive, high‑turnover growth strategy.
Why reduce Coinbase after supporting it for so long?
For years, Coinbase has been one of the most visible expressions of ARK’s belief in the long‑term significance of digital assets. Yet even a high‑conviction holding can become a source of risk concentration. Several factors likely underpin the recent series of sales:
1. Performance drag and volatility
With Coinbase underperforming both major cryptocurrencies and broader equity indices over key periods, it has become a notable drag on fund performance. High daily volatility also amplifies risk at the portfolio level, especially when prices move more violently than the underlying crypto markets.
2. Sensitivity to trading volumes
Coinbase’s revenue model is heavily tied to trading activity. The 9 percent quarter‑on‑quarter drop in centralized exchange volumes following October’s liquidation event highlighted the company’s dependence on cyclical trading conditions. In downturns, that reliance can compress margins and valuation multiples.
3. Regulatory and competitive uncertainties
Ongoing regulatory scrutiny in the United States, intensifying competition from both centralized and decentralized platforms, and fee pressure from rivals all add layers of uncertainty. Even if ARK remains constructive on Coinbase’s long‑term positioning, these factors may justify a more moderate weighting in the near term.
4. Portfolio balance and liquidity
Given Coinbase’s size within ARK’s funds and its high liquidity, it is a natural candidate when the firm needs to raise cash to fund new ideas or expand other positions. Selling part of a liquid winner (or former winner) is often operationally easier than trimming less liquid, smaller names.
Why lean into Bullish despite a large quarterly loss?
On the surface, increasing exposure to a company that just swung from profit to a sizable net loss might look counterintuitive. However, ARK’s investment philosophy historically tolerates near‑term losses in pursuit of longer‑term disruptive potential. Several considerations could be driving the Bullish additions:
1. Re‑rating opportunity after a drawdown
With Bullish down about 27 percent year‑to‑date despite a recent daily gain, ARK may view the stock as oversold relative to its long‑term prospects. The firm often uses pronounced pullbacks to scale into names it believes are misunderstood or temporarily out of favor.
2. Different revenue mix and business model
While both Coinbase and Bullish operate in the digital asset space, their product mixes, geographic focus, and institutional vs. retail orientation differ. ARK may see Bullish as offering differentiated exposure, potentially less tethered to the same set of risks that dominate Coinbase’s narrative.
3. Innovation and scaling potential
ARK typically prioritizes companies building new market structures or technological rails. If Bullish is perceived as investing heavily in infrastructure, institutional solutions or new trading architectures, near‑term losses could be seen as the cost of building out a potentially more scalable platform.
4. Relative valuation vs. growth expectations
After a sharp YTD decline, Bullish’s valuation metrics may look more attractive compared with its growth outlook than they did a year earlier. For growth investors, widening gaps between price and perceived future earnings power can create entry opportunities.
Implications for ARK’s ETF investors
For holders of ARKK, ARKW and ARKF, these moves underscore several broader themes:
– Active risk management within high‑beta sectors
ARK is not simply “buy and hold” on every disruptive name. The firm is willing to take profits, cut exposure, and rotate within a theme as market conditions evolve. That can reduce single‑name blow‑up risk, even if overall volatility remains high.
– Persistent conviction in digital assets, but with nuance
While ARK is reducing one of its best‑known crypto stocks, it is simultaneously adding another. That suggests continued belief in the long‑term importance of the sector, albeit with a more selective and diversified implementation.
– Continued concentration in innovation names
Adding positions such as Alphabet, Recursion Pharmaceuticals and Tempus AI shows ARK leaning further into its core innovation thesis across AI, genomics and next‑generation internet. Investors should expect the funds to remain highly exposed to sectors that can move sharply in both directions.
– Potential for performance whiplash
Because many of these holdings are sensitive to macro conditions, interest rates, and sentiment toward growth and crypto, ARK’s ETFs can experience rapid swings in performance. The same characteristics that enable big upside in bull phases can amplify losses when markets turn.
What to watch next
Looking ahead, several developments will be key to understanding whether ARK’s latest repositioning pays off:
1. Crypto market stabilization or renewed stress
If digital asset prices and volumes stabilize or recover, both Coinbase and Bullish could benefit, but the one with the more efficient cost structure and diversified revenue lines may outperform. ARK’s current tilt implies a belief that Bullish offers a compelling asymmetric setup.
2. Evolution of regulatory regimes
Regulatory clarity or additional enforcement actions in major jurisdictions could shift the competitive dynamics among exchanges and trading platforms. Any moves affecting custodial models, token listings, stablecoins or derivatives will be particularly important.
3. Execution on growth strategies
For Bullish, investors will watch closely whether management can narrow losses while growing volumes and expanding product offerings. For Coinbase, the focus will be on how effectively the company diversifies its revenue beyond transaction fees and adapts to lower‑volume environments.
4. ARK’s future trade disclosures
Whether ARK continues to sell Coinbase or eventually stabilizes and rebuilds the position will provide a real‑time signal of its evolving conviction. Likewise, ongoing accumulation or trimming of Bullish will reveal whether this is a tactical rotation or the early phase of a longer‑term bet.
Takeaway
ARK Invest’s latest portfolio moves reflect a nuanced re‑engineering of its crypto exposure rather than a wholesale exit from the sector. By paring back Coinbase — even as its share price rallies — and buying into a weaker Bullish, ARK is attempting to recalibrate risk while staying aligned with its core thesis that digital assets and trading infrastructure remain central to the future of finance. For investors, the message is clear: the firm is still betting on the long‑term growth of crypto and innovation, but it is increasingly selective about which companies it wants to carry that exposure.