Cathie Wood and Coinbase: Paper Hands and Martingales

Cathie Wood and Coinbase
Cathie Wood and Coinbase

Cathie Wood is world-renowned for her investments in Tesla, Coinbase, and high-tech companies. Today we are going to talk about the strategy that she has been applying regarding her participation in Coinbase since the beginning of the COIN listing until today.

 Coinbase launches its shares under the ticker COIN on April 14, 2021. A milestone that coincides with the highs of the bullish cycle of the first part of 2021, both in cryptocurrencies and in stocks. The prices that the stock reached on its first day of trading have not been seen again, for the moment.

ARK Investments bought 246 million USD, taking into account the total of instruments under management.

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The correlation between COIN and BTC is very significant. It has buying pressure when there is demand for Cryptocurrencies and selling pressure when the preference is to reduce the risk of the portfolio. In this case, we see the stock trading at prices similar to May 2022.

 In May 2022, it bought a total of 29 million USD through the ETFs it manages. That is called a Martingale, the goal is to improve the average dollar cost.

We have recently seen a number of SEC investigations into seemingly unregistered securities and insider trading. These may be the reasons that justified the sale of a significant percentage of COIN shares by ARK; the reality is that they decided to sell at the low of the last few days, and days after that the stock rallied. That is commonly known as Paper Hands.