ARK Investment increases Coinbase stake after CEO assures no exposure to FTX

• Coinbase managed to cut down Q3 losses by 50% despite declining revenue.
• ARK investment currently owns about 7.7 million shares of Coinbase's COIN.
• COIN and Bitcoin currently share a high correlation, warranting recovery in the crypto market to improve Coinbase's share price.

Coinbase managed to sneak past and paint itself as a secure exchange amidst Binance and FTX's headline-making events. Despite the last couple of bearish months, Coinbase has made it out on top, and its supporters are noticing the same and leaning further into the company.

ARK gathers more Coinbase

As the only publicly traded company, Coinbase is considered to be one of the most transparent and secure exchanges. Also, being the second biggest crypto exchange in the world, Coinbase has, over time, garnered the attention of major investors. One of them being ARK Investment Management. 

With over $14.11 billion worth of assets under its management, ARK is reportedly looking to increase its stake in Coinbase. Having already amassed 7.7 million shares of Coinbase's COIN, ARK is potentially going to add another 420,949 shares. This would bring ARK's total COIN holding to 8.12 million shares, currently valued at $403.5 million.

This development came right after Coinbase's CEO Brian Armstrong commented on the company's behalf that Coinbase did not have any material exposure to FTX, FTT or Alameda. He added,

"We are incorporated in the US, and publicly listed in the US because we believe that transparency and trust are so important. Every investor and customer can see our public audited financials, which shows how we hold customer funds. We've never issued an exchange token."

Furthermore, even though Coinbase's performance has not been exceptional in the last quarter, it has managed to cut down its losses. As per the Q3 earnings call, the company lowered its costs and slashed its workforce while also increasing the interest income. 

This helped Coinbase reduce the losses by 50% to $545 million, even though the transaction revenue came down by 44% from Q2.

Thus, although the exchange did not see a lot of growth, it did not see further losses either.

Coinbase and Bitcoin

Beyond investor interest, COIN's price takes precedence and the vulnerability it shares with the crypto market. Since Bitcoin and COIN have a 0.7 correlation, COIN could note some pullback when it comes to recovery since BTC itself is not doing very well.

Trading at $50.6, COIN has declined by more than 31.4% in the span of nine days, just as BTC fell from $21,299 to trade at $18,164 on Wednesday. If, going forward, this drawdown in the crypto market continues, COIN could also continue losing its market value.

COINUSD 1-day chart

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