Cathie Wood, founder and CEO of Ark Investment Management, is known for actively trimming positions after sharp rallies and adding exposure during periods of weakness – a strategy she applies both to smaller speculative bets and to Ark’s core holdings.
Last week, Wood reduced Ark’s exposure to Tesla, locking in approximately $40 million in gains. At the same time, she stepped up buying in another major Ark holding that has been under pressure: Coinbase Global.
Wood rose to prominence after the Ark Innovation ETF (ARKK) delivered a 153% return in 2020. So far this year, the flagship fund is up 39.39% as of Dec. 19, significantly outperforming the S&P 500, which has gained 16.2% over the same period.
However, Ark’s performance has been highly cyclical. During the 2022 market downturn, ARKK fell more than 60%, highlighting the risks embedded in Wood’s high-growth strategy.
Over the past five years, those swings have weighed heavily on long-term results. As of Dec. 18, the Ark Innovation ETF has posted a five-year annualized return of -8.72%, compared with a 14.48% annualized return for the S&P 500, according to Morningstar data. Over the past 12 months alone, ARKK has seen roughly $1.28 billion in net outflows, underscoring ongoing investor skepticism.
Wood dismisses fears of an “AI bubble”
Ark’s investment philosophy centers on disruptive technologies, including artificial intelligence, blockchain, genomics, and robotics. Wood views these sectors as long-term growth engines, even though they introduce significant volatility to Ark’s portfolios.
According to Morningstar analyst Amy Arnott, between 2014 and 2024 the Ark Innovation ETF erased roughly $7 billion in investor wealth, ranking it as the third-largest wealth destroyer among mutual funds and ETFs over that period.
Despite criticism, Wood remains confident in her long-term thesis. In a recent CNBC interview, she warned that markets could “shudder” as interest rates rise but pushed back strongly against claims that AI stocks are in a speculative bubble.
“I do not believe AI is in a bubble,” Wood said, arguing that large enterprises still need time to restructure their operations before fully capturing AI-driven productivity gains.
Not all investors share that conviction. Net outflows from ARKK continue, reflecting doubts about the sustainability of valuations across high-growth technology stocks.
Ark adds $26.1 million of Coinbase shares
Between Dec. 15 and Dec. 18, Ark funds purchased 106,530 shares of Coinbase Global (COIN), with a total value of approximately $26.1 million. The buying extends a gradual accumulation that began in mid-November.
Earlier in the year, Wood bought roughly 34,500 Coinbase shares in the first quarter, before selling a combined 674,000 shares over the second and third quarters, according to data from Stockcircle. Overall, Ark was a net seller of roughly 5.5 million Coinbase shares in 2024.
Even so, Coinbase remains the fourth-largest holding in the Ark Innovation ETF.
Top 10 holdings of ARKK as of Dec. 19, 2025:
- Tesla (TSLA): 12.32%
- Roku (ROKU): 5.89%
- CRISPR Therapeutics (CRSP): 5.47%
- Coinbase Global (COIN): 5.28%
- Shopify (SHOP): 5.27%
- Robinhood Markets (HOOD): 4.48%
- Tempus AI (TEM): 4.44%
- Palantir Technologies (PLTR): 3.90%
- Roblox (RBLX): 3.54%
- Advanced Micro Devices (AMD): 3.22%
Coinbase outlook tied to Bitcoin and diversification efforts
Coinbase operates the largest cryptocurrency exchange in the U.S., generating most of its revenue from transaction fees tied to crypto trading activity. As a result, its stock price has historically moved closely in line with Bitcoin.
When Bitcoin prices rise, trading volumes typically increase, boosting Coinbase’s revenue and investor sentiment. Conversely, downturns in crypto markets tend to pressure both trading activity and Coinbase shares.
Year to date, Coinbase stock is down 3%, while Bitcoin has fallen 5.6%, both lagging the broader market. Over the same period, the S&P 500 has gained more than 16%.
On Dec. 17, Coinbase announced plans to launch stock and ETF trading for U.S. users, allowing customers to trade traditional securities alongside cryptocurrencies within the same app. The move reduces Coinbase’s reliance on crypto-only revenue and positions it as a direct competitor to platforms such as Robinhood.
Following the announcement, Cantor Fitzgerald lowered its price target on Coinbase to $320 from $459, while maintaining an overweight rating. The firm described Coinbase’s strategy as a push toward becoming an “everything exchange,” which it views as strategically positive. However, analysts also cut near-term revenue and profitability forecasts amid softer crypto sentiment.
Cantor warned that consensus expectations for 14% trading volume growth in 2026 may prove overly optimistic if the market enters another prolonged crypto downturn.
Wood sees Bitcoin downside as limited
Wood has recently argued that Bitcoin’s traditional four-year cycle — driven by mining reward halvings — may be losing relevance. She suggested that the market may already have passed the low point of the current cycle.
“Volatility is coming down,” Wood said in a Dec. 9 interview on Fox Business, adding that institutional participation could help prevent deeper declines. She also noted that Bitcoin increasingly trades like a risk-on asset, moving in tandem with equities and real estate rather than serving as a hedge.
“Now, gold is more of a risk-off asset,” Wood said.
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