A few weeks ago, ARK Invest was heading for the exit on Coinbase. On February 5 and 6, the Cathie Wood’s firm offloaded roughly 119,000 shares worth $17.4 million as crypto-linked stocks took a beating. Money rotated out of COIN and into Bullish, a crypto exchange ARK was quietly accumulating for over 10 consecutive trading days.
Then, on February 18, ARK turned around and bought 41,453 shares of Coinbase worth $6.9 million across three of its ETFs.
So what changed?
The buy, broken down
The purchase was split across three funds. ARKK, the flagship Innovation ETF, took the largest chunk at 29,689 shares worth $4.9 million. ARKW added 7,525 shares for $1.2 million, and ARKF picked up 4,239 shares worth around $704,000.
This is not unusual behaviour for ARK. The firm operates with position limits, capping individual holdings at roughly 10% of any fund’s portfolio. As prices move, weights shift, and ARK rebalances. What looked like conviction selling in early February may have simply been weight management. The new buy looks less like a change in strategy and more like ARK getting back to its target allocation after trimming.
Still, the timing is worth noting.
The earnings nobody quite knows what to do with
Coinbase just reported a rough quarter on paper. Revenue came in at $1.8 billion for Q4 2025, down 5% from the previous quarter, and the company swung to a net loss of $667 million. Most of that loss came from $718 million in unrealized losses on its crypto portfolio and $395 million from strategic investments that went sideways.
The stock, somewhat confusingly, jumped 16.5% after the results dropped.
That tells you something. Markets had already priced in catastrophe. When the actual numbers landed, they were bad but not catastrophic enough, and investors breathed out.
But here is where it gets complicated.
Crypto market capitalisation has fallen more than 45% from its October peak, and that kind of collapse does not just hurt trading volumes once. It echoes. Some analysts expect trading revenue to fall another 20% in 2026 and do not see a full recovery until 2028.
With the stock now trading around $160 after its post earnings bounce, the argument that it is fairly valued rather than deeply discounted is perhps reasonable.
That is a long time to wait if you are buying today hoping for a quick rebound.
Why Coinbase Is Not the Same Company It Was in 2022
The bear case is real but it misses something important. Coinbase today is structurally different from the Coinbase that haemorrhaged money during the last crypto winter.
Subscription and services revenue, the part of the business that keeps ticking regardless of whether Bitcoin is having a good week, now makes up nearly 43% of total revenue. Five years ago, that number was a fraction of what it is today. Even if trading stays depressed, this side of the business is projected to keep growing, driven largely by stablecoins.
USDC-related revenue grew 48% in FY25, reaching $1.35 billion. USDC balances hit $76 billion in Q4, with Coinbase’s share of that growing 20% in just one quarter. People are using stablecoins even when they are not actively trading crypto, and that creates a steadier income floor for the business.
Perhaps most importantly, Coinbase is expected to remain profitable through this downturn, a meaningful contrast to 2022 when the company suffered dramatic losses. The floor is higher this time around. Institutional trading revenue also grew 31% year over year even as retail volumes collapsed, suggesting the business mix is genuinely shifting toward more stable ground.
So Who Is Right?
Some analysts see $160 as fair value for Coinbase given the trading revenue headwinds ahead. Others like Bernstein have a $440 price target, implying over 200% upside. ARK just bought $6.9 million worth at around $166.
The gap between those views is enormous, and it essentially comes down to one question: how quickly does crypto recover, and how much of Coinbase’s future depends on that recovery?
If trading volumes stay depressed until 2028, the stock is fairly priced today at best. If institutional flows, regulatory clarity, and a Bitcoin rebound bring retail traders back sooner, the current price looks very cheap in hindsight.
What to Make of It
ARK’s position in COIN now sits around $251 million in ARKK alone, making it the seventh largest holding in that fund. The sell in early February and the buy on February 18 together suggest the firm is actively managing exposure rather than abandoning the story entirely.
Regulatory conversations in Washington around market structure are picking up pace. Coinbase is expanding beyond crypto trading into equities and prediction markets. The services business keeps compounding quietly in the background.
At roughly 11.9x forward EV to EBITDA, the valuation case is interesting. The risk case, a crypto market that stays depressed for two more years, is equally real.
Cathie Wood just voted with $6.9 million that the market is underpricing the recovery. Someone is going to be very wrong about where this goes.
The answer depends almost entirely on where Bitcoin goes from here.
Sonia Boolchandani is a seasoned financial writer She has written for prominent firms like Vested Finance, and Finology, where she has crafted content that simplifies complex financial concepts for diverse audiences.
Disclosure: The writer and her his dependents do not hold the stocks discussed in this article.
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