ARK Invest CEO and Chief Investment Officer Cathie Wood said in a recent interview with Bloomberg. Discussed Her flagship fund, Ark Innovation (ARKK), is increasing its position in Coinbase (COIN) shares after the Securities and Exchange Commission (SEC) sued Binance, one of Coinbase’s biggest competitors. why.
ARKK purchased approximately 330,00 shares of COIN on June 6, 2023. worth At the time, the cost was about $17 million, according to a disclosure statement. Two other exchange-traded funds (ETFs), the Ark Fintech Innovation ETF and the Ark Next Generation Internet ETF, also added 35,700 shares worth $1.8 million and 53,900 shares worth $2.8 million, respectively.
Ark’s average entry value across all three funds price is between $272.75 and $282.93 and the company’s total positions are currently valued at $1.77 billion. At the time of writing, COIN is trading at $53.90. Needless to say, the fund has so far lost big on the deal.
As for why she’s still bullish, her reasoning boils down to this: Coinbase will be the lone game when it comes to U.S. cryptocurrency exchanges due to SEC enforcement. Of course, this assumes Coinbase wins its legal battle with the SEC.
Wood explained that he sees differences in the charges being filed against the two exchanges. Both companies face SEC lawsuits over alleged trading and staking of unregistered securities, but Binance could face more serious charges as well.
Binance CEO Changpeng Chao, abbreviated as CZ, was sued in March by a US derivatives regulator. The lawsuit alleges that CZ and three exchange affiliates violated several regulations of the Commodity Exchange Act and the Commodity Futures Trading Commission.
According to Wood, these types of allegations “have nothing to do with Coinbase.” Therefore, she believes that by eliminating its biggest competitor, Coinbase can weather the storm and come out victorious.
It is difficult to say whether Wood’s conviction regarding COIN can be considered justified enough. Some analysts agree with her view, others disagree.Analyst consensus The stock is rated Hold and has an average target price of $58.49, or about 12% above its current level.
Several prominent analysts, including John Todaro and Atlantic Equity, have put more bullish price targets at $70.
The Relative Strength Index is almost completely neutral at 49.7, suggesting that COIN has no definitive direction at this time.
When it comes to US-based cryptocurrency exchanges, COIN may be the best and soon the only option. However, this alone may or may not lead to an increase in the COIN price.
When evaluating a stock’s future outlook, most analysts tend not to consider one factor in isolation. Base your investment theory on the sole premise that a company’s competitors may go bankrupt, which may lead analysts to ignore other, and perhaps even more important, factors.
Could Coinbase be criminally prosecuted in the future?
It’s worth repeating that Coinbase also faces problems such as: Lawsuit from SEC Regarding trading and staking of unregistered securities. This could ultimately lead to the exchange being deemed to have participated in illegal activity.
But perhaps even more concerning than the SEC’s enforcement action is the suspicion that Coinbase may have invested in projects that were supposed to be listed on exchanges before they were made public.
After Coinbase CEO Brian Armstrong talked Rumors began circulating that the company may have done just that on a June 10 Wall Street Journal article. During the interview, Armstrong did not adequately answer a question regarding whether Coinbase invests in tokens listed on the platform.
It’s no secret that almost every time a new token is listed on Coinbase, the price goes up.
If this were indeed the result of an organized pump-and-dump scheme, it could be a financial crime of epic proportions.
The question is, is there potential evidence for such serious charges?
Well, yes, no.
Looking at Coinbase Venture’s portfolio, it appears that 30 projects in their investment portfolio are also listed on the exchange. However, Coinbase Ventures claims it does not “work with review teams or listing teams,” and that it “operates and is staffed separately from its core business.”
This doesn’t necessarily mean that Coinbase has used its exchange as a giant pump-and-dump scheme, but it could indicate another thing financial regulators should consider investigating. be. Needless to say, news of such a survey probably doesn’t bode well for COIN’s stock price.
Related: SEC Seeks More Time to Respond to Coinbase’s Call for Crypto Clarity
Bitcoin to $1 million?
In a conversation with Bloomberg, Wood reiterated his view that Bitcoin is a hedge against inflation. Still, he said he sees deflation as a big risk going forward. Despite this, she remains bullish on the Bitcoin price and sticks to her $1 million target.
Bitcoin experienced a golden cross in February, with the 50-day Exponential Moving Average (EMA) above the 200-day EMA. Volume has also fallen in tandem with Chaikin’s money flow, suggesting a potential sideways trade for the foreseeable future.
According to Wood, Bitcoin could still outperform in a deflationary environment as it is “an antidote to counterparty risk in the traditional financial system.”
Three of the four largest bank failures in U.S. history Occurred In the last three months she has been able to score points.
The next Bitcoin halving event will take place within a year. As seen in the chart below, investors are currently in the ‘build-up’ phase of the cycle.
Will Wood’s $1 million price prediction come true at the next cycle top?
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This article is for general informational purposes and is not intended, nor should it be taken as legal or investment advice. The views, thoughts and opinions expressed herein are those of the author alone and do not necessarily reflect or represent the views or opinions of Cointelegraph.
