ARK Invest increases Coinbase and reduces Block share what signals does it send, and why is it clearly bullish on Bitcoin?

Author:Weilin , PANews

ARK Invest has made frequent changes in holdings for crypto companies recently: On March 10, it purchased 52,753 shares of Coinbase ($9.4 million) through the ARKK Fund and 11,605 shares of Coinbase ($2.1 million) through the ARKF Fund. On March 14, the company increased its holdings of Coinbase stock worth approximately $5.2 million through the ARKK fund. The recent three increases in Coinbase have totaled US$16.7 million.

It is worth noting that ARK Invest has significantly reduced its position in payment company Block, and the three positions on March 11, March 12 and March 17 were about US$30.355 million.

At the same time, in this month's market, what is unforgettable is that on March 11, the price of Bitcoin experienced a sharp drop, but the bullish comments from ARK Invest founder Cathie Wood at that time attracted widespread attention from the market. The company, which manages $6 billion assets, said in a note to investors that ARK Invest remains optimistic about BTC’s long-term outlook. Why is ARK Invest firmly optimistic about Bitcoin?

US stocks buy $16.7 million in the bottom during the sharp drop, and

significantly reduce their holdings in Block

On March 10, Ark Invest bought 64,358 shares of Coinbase stock worth $11.5 million as Coinbase shares fell 17.6%. Among them, Ark Innovation ETF (ARKK) purchased 52,753 shares of Coinbase (US$9.4 million) and Ark Fintech Innovation ETF (ARKF) purchased 11,605 shares of Coinbase (US$2.1 million). In addition, according to trading documents, ARK Invest increased its holdings of 29,353 shares of Coinbase stock through its ARK Innovation ETF (ARKK) on March 13, worth approximately US$5.2 million, while Coinbase's share price fell 7.43% to close at US$177.49 on the same day. ARK Invest has increased its positions in Coinbase in the past three times in recent days, totaling US$16.7 million.

As of March 17, Coinbase stock is currently the third largest holding in its ARKK fund, with a weight of 7.11%, and a value of about $383 million, behind Tesla and Roku (US streaming and network television companies). ARK Invest previously said its goal is to ensure that a single stock holding does not exceed 10% of the fund's portfolio.

As of March 17, Coinbase stock was the company's second largest stake in its ARKF fund, with a weight of 7.35% and a value of approximately $67.17 million, second only to Shopify. In the ARK Next Generation Internet ETF (ARKW), Coinbase's position ranks fifth, ranking behind ARK BITCOIN ETF HOLDCO (ARKW), TESLA, Roku, and ROBLOX CORP, with a position of approximately US$86.55 million. Accounts for 5.78%.

In terms of position reduction, ARKW sold 12,881 Block shares in the trading on March 17. On March 12, Block announced that it will become the first enterprise in North America to deploy NVIDIA DGX SuperPOD and DGX GB200 systems, marking a major progress in its open source generative AI research and predicting that its performance will be significantly improved. CEO Jack Dorsey expects the system's computing power to increase by 30 times higher than current levels. However, Raymond James analyst John Davis believes the company's poor fourth-quarter earnings report shows that Block stock is "not suitable for timid investors." The stock sold by ARK Invest on March 17 was $58.65 per share, with a total transaction value of approximately $755,000. From March 11 to March 12, ARK Invest sold a total of $29.6 million in Block's shares.

Being bullish on Bitcoin "sells out" in a sharp drop, why is ARK Invest

staying optimistic about Bitcoin's long-term prospects?

In a latest report to investors, ARK Invest, which manages $6 billion in assets, remains optimistic about the long-term outlook for BTC. In the report, ARK Invest said Bitcoin is at oversold level. Specifically: In February, the price of Bitcoin fell 17.6% and closed at $86,391 at the end of the month. As of March 3, the price of Bitcoin is between the short-term holder (STH) cost base ($92,020) and the 200-day moving average ($82,005).

The Fear & Greed Index has reached a level of "extreme fear" that has not been seen since mid-2022. But ARK Invest believes that the market is overreacting and overly pessimistic to current macroeconomic and geopolitical sentiment.

Bitcoin’s cost-effectiveness ratio (SOPR) has been completely retraceed to 1. In a bull market, a SOPR of 1 means that the market as a whole is at a breakeven level, which usually coincides with the local bottom. SOPR tracks realized profits or losses and compares them with the relevant transaction prices.

In addition, Bitcoin’s rolling four-year compound annual growth rate (CAGR) has dropped to its all-time low at just 14%. Although this has a significant impact on Bitcoin as a long-term holding asset, a lower CAGR may also be a signal that Bitcoin is oversold.

Speaking of the macro environment, ARK Invest said economic indicators, including a slowdown in currency turnover growth and a decline in consumer confidence, showed that business and households have increased caution during the political transition. According to the University of Michigan Consumer Confidence Survey, consumer confidence has dropped below pre-election levels. Families seem to become more cautious, delaying purchases until the impact of the new policy becomes clear. Evidence of this cautious attitude includes a decline in real consumer spending in January and lower-than-expected performance guidance issued by companies such as Walmart and Target.

Nearly one-third of the workforce, including federal, state, local, and quasi-government positions in the education and healthcare sectors, may worry about government spending cuts. Despite challenges in the near term, potentially relaxed regulation, tax cuts and innovative incentives in areas such as artificial intelligence (AI) and robotics may drive growth and increase productivity over time. Researchers have previously predicted that the combination of artificial intelligence and encryption will add $20 trillion to the global economy by 2030. Previously, ARK Invest stated in the "Big Ideas 2025" report that the price of Bitcoin may be between $300,000 and $1.5 million by 2030, of which the neutral expected is $710,000.

In Cathie Wood’s podcast In the Know, she paints a bullish vision that technological innovation will drive real GDP growth more than twice the historical growth rate, even as short-term economic indicators show signs of weakness. "We are approaching the end of a 'rolling recession'," she said, referring to her view that the recession has been unfolding since the Fed began hikes in 2022. “The bad news is that we have to go through this process.” A “rolling recession” refers to an economic phenomenon in which different industries and sectors take turns experiencing recession while the overall economy and job market remain relatively stable.

She later said on Twitter that the current crisis (the "process" mentioned in her video) may be the door to a "deflationary prosperity" by the second half of 2025. Despite the current weak economy, Cathie Wood seems to be in line with Trump’s optimistic view of the future of the U.S. economy, especially as new technologies rise to reshape the economy. “We are probably at the threshold of the most important productivity growth in history,” she said.

Cathie Wood discusses fiscal policy proposals under the Trump administration, including a $4.5 trillion tax cut that has passed the House Budget Committee. She believes Trump's fiscal policy, coupled with efforts to relax regulation, could trigger a major economic boom.

She mentioned changes in the cryptocurrency and digital assets sectors following the departure of SEC Chairman Gary Gensler, pointing out that the industry is celebrating the "digital asset revolution" at the White House.

For investors, Cathie Wood predicts that the market will shift from the "seven tech giants" to a wider range of innovative stocks. She pointed out that although the stock prices of the "Seven Tech" companies have tripled in the past five years, the truly disruptive innovative stocks have increased by only about 30%.

At present, ARK Invest's optimistic attitude towards Bitcoin and the US economic outlook is not without basis. It has also injected a dose of heart-warming agent into the generally negative market environment recently. However, the complexity of the market and the uncertainty in reality cannot be ignored. How to find the growth momentum of the encryption and technology industry in a variety of variables is worth thinking about.