Ark Invest, led by Cathie Wood, is making significant changes to its ETF holdings, selling off shares of Coinbase and reinvesting in other stocks. The move comes as Coinbase’s stock has seen a remarkable surge in value, prompting Ark to reallocate its capital.

Ark’s decision to reduce its position in Coinbase is driven by the stock’s exceptional performance, which saw a 391% increase last year, largely attributed to Bitcoin’s performance. As a result, Ark has been systematically selling off its Coinbase shares since last summer, with further sales at the beginning of 2024. This has led to a reduction in the stock’s weight in the Ark Innovation ETF, as well as in its internet and fintech ETFs.

Conversely, Ark has chosen to reinvest the proceeds from its Coinbase sales into Roku, a stock that was previously not favored by the firm but has now become a top holding. With Roku now being the third-largest holding in the Ark Innovation ETF, Ark’s analysts are optimistic about its future potential, projecting a significant climb in its value.

Despite the sell-off of Coinbase shares, it is important to note that Cathie Wood’s confidence in the company remains strong. The decision to reduce its stake is purely a response to the stock’s remarkable price appreciation, which has significantly increased Coinbase’s weight in Ark’s ETFs. In fact, the stock’s weight in the portfolio has grown from about 7% to 8% and even surpassed 9% in late December.

Ark Invest’s strategic moves in its ETF holdings reflect the dynamic nature of the stock market and the firm’s proactive approach to capitalizing on emerging opportunities. As Ark continues to navigate the evolving investment landscape, its decisions are closely watched by market participants and investors alike.