Coinbase (NASDAQ:COIN) stock is in focus amid regulatory issues and continued purchases from Ark Invest’s Cathie Wood. Yesterday, the ARK Innovation ETF (NYSEARCA:ARKK) disclosed purchasing 122,038 shares of COIN stock, its first purchase since April 5. Following the transaction, Ark now owns a total of 7.72 million shares of Coinbase, making it the seventh-largest position among all Ark exchange-traded funds with a 4.74% allocation.
At the same time, data obtained from Cathie’s Ark shows that Ark’s COIN stake is sitting on heavy losses. ARKK’s Coinbase position has an average cost basis of $254.65. Meanwhile, the ARK Fintech Revolution ETF (NYSEARCA:ARKF) has a cost basis of $239.60 and the ARK Next Generation Internet ETF (NYSEARCA:ARKW) has a cost basis of $242.
Today, COIN stock is trading in the mid-$50 range.
COIN Stock: Wood Discloses Buys Amid Legal Turmoil
On Monday, it was announced that Coinbase had sued the U.S. Securities and Exchange Commission (SEC) due to its silence on crypto regulation questions. In July 2022, the crypto company sent the SEC a petition asking it to “propose and adopt rules to govern the regulation of securities that are offered and traded via digitally native methods.” The SEC has still not provided a response.
“So the action Coinbase filed today simply asks the court to ask the SEC to share its decision,” said Chief Legal Officer Paul Grewal in a company blog post.
Back in March, the SEC slammed Coinbase with a Wells notice, which acts as a warning that regulatory enforcement action may soon be taken for a violation of securities laws. “We asked the SEC for reasonable crypto rules for Americans. We got legal threats instead,” said Coinbase at the time.
As all of this has gone on, Coinbase users have appeared take notice. Both Bitcoin (BTC-USD) and Ethereum (ETH-USD) are up more than 50% year-to-date (YTD), although Coinbase’s trading volume has fallen to its lowest since the beginning of 2022. In April, trading volume has totaled $26.8 billion, which is on track to become the “lowest level in 16 months.” Rising crypto prices and trading volume usually have a positive correlation.
Meanwhile, shares of COIN stock have fallen about 11% in the past month. Only time will tell if current prices present a “buy the dip” opportunity, although Cathie Wood certainly thinks so.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
