Coinbase Stock Surges as Bitcoin Rebounds and Cathie Wood's Ark Invest Continues Aggressive Buying

Coinbase Global Inc. (COIN) shares rallied over 5% on Wednesday, closing at $276.92, as Bitcoin surged back above $93,000. The move underscores the strong correlation between the exchange's stock and the price of the leading cryptocurrency, with increased trading activity during Bitcoin rallies directly boosting Coinbase's revenue.

The stock's rebound follows a recent period of volatility, including a downgrade to "Hold" from Argus Research, which flagged the stock's high valuation multiple of 39x estimated 2026 earnings. However, investors appeared to shrug off these concerns, buoyed by Coinbase's strong third-quarter earnings report, which showed $1.50 in earnings per share, significantly beating the $1.10 consensus.

A key driver of sentiment is the continued accumulation of COIN shares by Cathie Wood's Ark Invest. On Tuesday, Ark purchased an additional 28,315 Coinbase shares for its Ark Innovation ETF (ARKK), spending roughly $7.5 million. This follows a $16.5 million purchase across three Ark ETFs on November 26. Coinbase is now ARKK's second-largest holding with a 5.6% weighting, valued at approximately $409.6 million.

Ark's trading strategy involves active rebalancing due to internal rules that prevent any single holding from exceeding 10% of a fund, making COIN's volatility a routine trigger for adjustments. The firm also expanded its positions in other crypto-linked equities, buying $1.8 million worth of Bullish shares and adding Robinhood stock to its Ark Next Generation Internet ETF (ARKW).

Despite the midweek bounce, Coinbase shares remain down 21.7% over the past month and are only 2.6% higher year-to-date, reflecting a broader slump in crypto-linked equities. Technically, the stock sits about 13.9% below its 50-day moving average. Investors are now looking ahead to December 17, when Coinbase is expected to unveil new products, potentially including a prediction market and stock trading features.