ARK Invest Reallocates Capital from Coinbase to Bullish During Crypto Downturn

2026-02-07 companies

New York, Saturday, 7 February 2026.
Cathie Wood executed a precise pivot during the recent market rout, selling $17.4 million of Coinbase to fund a corresponding $17.8 million stake in the Bullish exchange.

Strategic Portfolio Rebalancing

On Thursday, February 5, ARK Invest divested 119,236 shares of Coinbase, a transaction valued at approximately $17.4 million [2][7]. This capital was immediately deployed into the purchase of 716,030 shares of Bullish, totaling roughly $17.8 million [6][7]. This swap represents a rotation rather than a retreat; the firm effectively moved funds from one crypto-adjacent equity to another during a period of intense volatility, rather than holding the proceeds in cash [7]. The transactions occurred as the broader digital asset market faced severe pressure, with Bitcoin falling to a low of $60,000—its weakest price point since November 2024 [2].

Market Valuation and Earnings Context

The timing of this reallocation is significant, occurring just after Bullish released its fourth-quarter financial results. While the exchange reported a substantial GAAP net loss of $563.6 million, it reportedly topped quarterly estimates, a factor that likely contributed to ARK’s decision to increase its exposure [1][7]. Conversely, the market has been punishing both stocks; on the day of the trade, Coinbase shares closed down 13.34 percent at $146.12, while Bullish shares fell 8.5 percent to $24.90 [2][6]. Since its listing in 2025, Bullish stock has struggled to find its footing, currently trading down more than 60 percent from its debut [7].

Defensive Positioning Amidst Volatility

Despite the sale, ARK Invest retains a high-conviction position in Coinbase. Following the Thursday transaction, the firm still holds approximately $312 million worth of Coinbase stock across its exchange-traded funds [7]. Market analysts interpret the sale of the $17.4 million tranche as a short-term defensive measure to manage risk rather than a loss of long-term confidence [7]. This adjustment comes as Coinbase shares have dropped more than 40 percent over the past month, hitting multi-month lows as trading volumes on exchanges slow [7].

Sector Outlook

This trade highlights ARK’s strategy of capitalizing on valuation disparities within the crypto sector. By trimming a position in Coinbase—which experienced a monthly decline of 41.7 percent—and reallocating to Bullish, which saw a 39.6 percent drop over the same period, Wood is attempting to capture greater value from distressed equities [6]. The move suggests a belief that Bullish, which is also the parent company of CoinDesk, offers a more attractive risk-reward profile at its current price of $24.90 compared to the broader market leader [2].

Sources

Cryptocurrency Asset Management