Run COIN Rebound in Active Fintech ETF ARKF
Has spring come early in the crypto world? The world’s most recognizable digital asset, bitcoin, is up 12% in the past five days and 26% in a month after falling 50% in a year. Bitcoin rebounding revives the investment case for a digital asset and fintech platform like Coinbase (COIN), which investors can keep an eye on in an active fintech ETF like ARK Invests ARK Fintech Innovation ETF (ARKF).
ARK Invest CEO Cathie Wood and the firm’s investment committee have been buying low on COIN for several weeks, based on the firm’s belief in the company’s disruptive innovation among fintechs and as a central trading platform for digital assets. ARKF itself last added 144,000 shares in COIN on January 5, while the firm’s parent flagship, ARK Innovation Fund (ARKK), added 52,000 COIN shares in the last Thursday.
COIN shares rose around 15% on Martin Luther King Day thanks to bitcoin rising above $17,000 for the first time since December 16, as well as on-chain analysis highlighting a significant oversold condition for the stock, according to ARK Invest. Risk appetite has also grown in the broader stock market, which could help COIN even more going forward.
Whales can also play an important role in bitcoin’s price rise, also with bitcoin mining becomes more difficult, the supply decreases. Add to the news that COIN seemed to cut costs by reduce total staff by 20%and ARK’s case for COIN becomes even clearer.
ARKF has COIN with a weight of 9.9%, the third largest stock weight after Shopify (SHOP) and Block (SQ) at 11.4% and 11% respectively. The active fintech ETF takes 75 basis points for its exposures, and actively invests in fintech platforms as well as firms that benefit from advances in mobile transactions and blockchain technology.
The strategy has outperformed the ETF database category average and the FactSet segment average over one month, with 5.4% outperforming the average returns of 0.7% and 4.1%, respectively.
Investors may have concerns about crypto-related stocks, given the crypto winter that digital assets have faced over the past year. ARKF and its disruptive innovation focus is looking at COIN for the long term, with the platform’s future potential as a hub for crypto and blockchain activity. For those investors looking for exposure to COIN and other fintechs, ARKF could be an ETF to watch in the weeks ahead.
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