Cathie Wood’s ARK ignores Silvergate and buys Coinbase shares for the sixth month in a row

Bitcoin (BTC) exchange Coinbase has remained a steady “buy” for ARK Invest throughout the recent price drop.

The latest data shows that ARK is continuing to buy COIN shares despite concerns about the bankruptcy of Silvergate bank, a major Coinbase partner.

ARK ETF continues to replenish Coinbase stocks

In the latest demonstration of its fearless approach to the crypto space, ARK bought another 47,568 shares of Coinbase on March 7.

These join the approximately 6 million shares already in ARK’s ARKK exchange-traded fund (ETF) at the beginning of the month, and are already the third purchase of the week.

However, COIN itself has been under pressure since early February, falling from local highs of $87.50 to its current level of $61.69 – a drop of almost 30% in just over a month, according to data from TradingView.

COIN/USD 1-day candlestick chart (Nasdaq). Source: TradingView

While Silvergate sparked new scrutiny when it comes to crypto exchanges in particular, the events didn’t seem to faze ARK and CEO Cathie Wood, known for bucking the trend and increasing exposure to assets like COIN , even during the 2022 bear market.

In a recent edition of its weekly newsletter released Feb. 27, ARK hinted at its rationale, expressing excitement over Coinbase announcing its Ethereum Layer-2 network, Base.

“In our view, Coinbase’s decision to build and integrate its services into a decentralized crypto infrastructure highlights its deep alignment with the fair, transparent, and accessible financial services that public blockchains aim to provide,” it wrote.

“While it won’t be drawing transaction revenue from Base at launch, Coinbase will likely benefit financially if its Wallet serves as a trusted ramp and entry point to applications on the network as it scales.”

ARKK COIN holds chart. Source: Cathie’s Ark

The buy-ins come at a price: The company’s cost base is currently $254 per share, much higher than their current value.

GBTC Inches Up as Bitcoin ETF Battle Goes to Court

This week also benefits from Bitcoin’s largest institutional investment vehicle, the Grayscale Bitcoin Trust (GBTC).

Related: GBTC approval could bring investors “a few billion dollars”: CEO of Grayscale

Amid times of crisis for owner Grayscale in its long-running battle to convert and launch GBTC as an ETF in the United States, the Trust saw modest gains in value early in the week.

A court is currently deciding whether the US regulator, the Securities and Exchange Commission (SEC), has the right to continue to deny the launch of what would become the market’s first Bitcoin spot price ETF.

GBTC remains near a record discount to Bitcoin’s spot price, with the stock trading at an implied price nearly 50% lower than BTC/USD, according to data from the monitoring source Coinglass.

As always with the ETF story, criticism remained meanwhile.

“GBTC spot ETF approval would dump BTC price and inflate ETF,” statistician Willy Woo argued on the 8th of March.

“The pent-up selling pressure on GBTC that accumulated during the bear market (as reflected in the GBTC discount) would be released into the open market.”

GBTC premium vs. asset positions vs. BTC/USD chart. Source: Coinglass

ARK, meanwhile, owns 5.53 million GBTC shares, with the last increased exposure in November 2022, immediately after the FTX debacle erupted. In January, it reduced its holdings by 500,000 shares.

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