ARK Innovation ETF Achieves Best Monthly Performance Since Launch in January 2014

ARK Innovation ETF (ARKK) Cathie Wood managed to achieve an excellent performance in January, marking a partial recovery from the tumultuous bear market of 2022.

The fund’s shares closed the month at $39.93, an increase of nearly 28 percent compared to the end of December, marking its best monthly performance since its launch in 2014.

The stated goal of the Innovation ETF is to capture growth from technological investments that could potentially change the world. However, after a record increase of 154 percent in 2020, the fund’s market price slid 24 percent in 2021, and then fell 60 percent due to inflationary pressures last year.

The fund holds a significant amount of shares in companies like Tesla and Zoom, and it also holds millions of shares in the cryptocurrency exchange Coinbase. The crypto company based in San Francisco accounts for 4.5 percent of the fund’s holdings, which is a position worth $347 million.

Increased Stake in Coinbase

ARKK’s stake in Coinbase increased last year despite the crypto bear market, according to a website that tracks holdings. Ark Invest pressed the ‘buy’ button 24 times last year, accumulating about 2.7 million shares of Coinbase, even after selling more than a million shares in July.

Ark Invest first began adding Coinbase to its innovation fund in October 2021, a few months after its initial public offering. The investment firm also holds shares of Coinbase in its Fintech Innovation ETF and Next Generation Internet ETF, which also holds shares worth $70 million in the Bitcoin Grayscale trust.

Wood recently acknowledged how much Coinbase’s stock price was adversely affected by the collapse of former competitor FTX, stating that its value ‘amortized in response to the fallout across the entire crypto market’.

But Coinbase’s stock price had been constrained long before that. Since it reached a peak of $368 in November 2021, when cryptocurrency prices were much higher, Coinbase’s stock price has fallen over 80 percent to $65.70 at the time of writing.

However, the recent rise in the prices of Bitcoin and Ethereum has brought higher prices for Coinbase’s shares as well. While Bitcoin has risen 38.5 percent year-on-year, and Ethereum 31.4 percent, shares of the crypto exchange have increased 95.5 percent since the beginning of the trading year.

Although there has been short-term pain, Wood believes that the implosion of FTX will ultimately be a boon for Coinbase, allowing for business growth.

– Coinbase will become the primary regulatory-compliant on-ramp for crypto and will take a significant share now that one of its main competitors has gone bankrupt – wrote Wood.