Ark Invest’s Unwavering Coinbase Support Amid SEC Lawsuits: Market Implications and Future

Intricate financial landscape, crypto exchange under siege, stormy sky, Cathie Wood confidently supporting Coinbase, legal documents swirling, warm sunlight breaking through clouds, chiaroscuro lighting, impressionistic style, mood of resilience, hint of uncertainty, investors cautiously watching.

Cathie Wood’s investment management firm, Ark Invest, has purchased additional shares of Coinbase (COIN) as the stock price dropped in response to the US Securities and Exchange Commission (SEC) suing the exchange for supposedly violating securities laws. Ark Invest is the fourth-largest holder of Coinbase and continues its buying spree since last year, showing unwavering support despite crypto market volatility, regulatory crackdowns, and industry bankruptcies.

On June 6, Ark Invest funds purchased a total of 419,324 COIN shares worth $21 million as the price dipped below $50. The firm bought shares for its ARK Innovation ETF (ARKK), ARK Next Generation Internet ETF (ARKW), and the ARK Fintech Innovation ETF (ARKF). As of March 31, Ark Invest held more than 12 million COIN shares and maintains a bullish stance on Bitcoin, even reiterating a Bitcoin price target of $1 million by 2030.

The SEC has recently charged Coinbase for operating as an unregistered securities exchange, broker, and clearing agency, as well as for an unregistered crypto asset staking-as-a-service program. It has even received show cause notices from ten state securities regulators including California, Alabama, and New Jersey. The SEC lawsuit against Coinbase alleges SOL, ADA, MATIC, FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH, and NEXO as securities.

Furthermore, the US SEC filed a lawsuit against the world’s largest exchange, Binance, its US branch, Binance.US, and CEO Changpeng “CZ” Zhao, accusing them of violating securities laws, misleading investors, and selling unregistered securities. The SEC filed a total of 13 charges against Binance and its affiliates.

Despite the legal troubles, Coinbase’s stock price managed to respond positively. COIN stock price initially fell by 21% to a low of $46 after the SEC lawsuit; however, it rallied, closing at $51.61. Investors, including Ark Invest, buying shares on the dip led COIN price to almost jump 3%. Currently, COIN price is trading at $52.75, representing a 2% increase after the market close.

While the legal battles waged by the SEC against crypto giants like Coinbase and Binance might create uncertainty in the marketplace, the persistent support by key investors, such as Ark Invest, demonstrates the enduring belief in the potential of the cryptocurrency world. It will be interesting to see how the market reacts and adjusts to these regulatory challenges in the upcoming months. No matter the outcome, it is crucial for investors to conduct thorough market research before making any investments in cryptocurrencies, as the market remains volatile.

Source: Coingape

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