One of the most vocal figures on Wall Street is Cathie Wood, the CEO of Ark Invest, known for her bold and unconventional predictions in emerging tech trends. She holds the largest position in cryptocurrency trading platform Coinbase (NASDAQ: COIN) across all her exchange-traded funds (ETFs). Wood’s strong belief in Bitcoin aligns with her substantial investment in Coinbase.
However, the primary reason behind Coinbase being Wood’s top holding is likely its staggering nearly 400% surge in 2023. Given this remarkable rebound from its all-time lows, the question arises: Is Coinbase a wise investment in 2024, or is it time for investors to secure profits?
Let’s delve into factors that could drive further growth for Coinbase as we approach 2024.
Bitcoin’s Influence Just a year ago, Coinbase’s stock hovered around $32 per share. As 2023 draws to a close, it’s trading at about $175. Such a substantial leap in stock value was likely driven by more than just a common “buy-the-dip” mentality.
The chart reveals striking similarities in the price movements of Bitcoin and Coinbase stock since the company went public in 2021. Coinbase appears to mirror Bitcoin and the overall crypto market’s sentiment. Essentially, as crypto prices rise, so does Coinbase stock—and conversely.
Following a challenging phase in 2022, investor enthusiasm for crypto returned in 2023. While this revival benefits investors in Coinbase and Bitcoin, it might seem puzzling at first glance. However, there’s more to it than meets the eye.
Institutional Backing Emerging? Renewed interest in crypto has been propelled by the potential introduction of spot Bitcoin ETFs. The SEC is evaluating applications from various entities like Ark Invest, VanEck, BlackRock, and others.
Approval of these spot Bitcoin ETFs by the SEC holds immense significance for the crypto industry, offering regulatory validation to what has been primarily a speculative investment. These ETFs could provide investors exposure to Bitcoin without directly buying the token or navigating the complexities of crypto purchases.
While approval could trigger increased crypto buying, benefiting Coinbase, the company also stands to gain from another, subtler yet lucrative opportunity.
