One of the more intriguing stocks to watch today is Coinbase (NASDAQ:COIN). Indeed, while shares of COIN stock are trading roughly flat today, there’s some big news investors may want to keep an eye on, as this crypto company looks to innovate its way toward growth in this nascent sector.

Today, Coinbase announced that the company will be launching its own layer-2 blockchain. Named “Base,” this blockchain is aimed at developers looking to launch their own decentralized applications.

Indeed, given Coinbase’s engineering talent and ties to the sector, this move makes sense. Many investors have called for more vertical integration, and this is certainly one step in that direction.

On the heels of this news, famed fund manager Cathie Wood also appears to be buying into this growth story. Wood’s ARK Invest has bought more than $13 million of COIN stock on Thursday, according to an investor email. This would be the largest purchase of Coinbase stock this year, providing significant interest in this stock for growth-focused investors.

Let’s dive into what to make of this news today.

Cathie Wood Bets Big On COIN Stock

Cathie Wood is a noted bull in the crypto sector. Her previous bets on Bitcoin (BTC-USD) and other crypto-related companies like Coinbase speak to her overall thesis that she thinks this is the future of finance. Thus, today’s move by Coinbase appears to have stoked her beliefs further that this is a company with a bullish long-term trajectory.

With crypto prices recovering, Wood’s bets on the sector have paid off nicely this year. Despite being among the worst fund managers in 2022, her performance this year suggests that high-beta investing can work well in a risk-on environment. Indeed, if this rally continues, she may be proven right about her thesis over a longer time frame.

That said, it remains to be seen if this risk-on rally can continue. There’s plenty of macro data pointing to the idea that economic softening could be in the cards. Accordingly, if we’re due for a deep recession (as many believe), it’s possible that higher-risk assets could sell off significantly from here.

Thus, right now, this bet looks smart. But I think we have to wait and see how this all turns out. In either case, I expect more volatility on the horizon for COIN stock and other disruptive companies. While this news is nice, I’m taking a cautious approach to this space right now.