Coinbase shares have collapsed to their lowest point since the exchange's market debut in April 2021. Fear of contagion spread after the demise of rival FTX exchange is driving the current sell-off, but one contrarian investor has embarked upon a buying spree.
Cathie Wood, CEO of Ark Investment (ARKK), seems undeterred by the fallout from the FTX scandal, which saw the collapse of one of the world's most prominent cryptocurrency exchanges and the demolition of its CEO Sam Bankman-Fried's reputation.
Read more: Crypto tanks after FTX implosion
The haul is worth about $53m based on Tuesday’s Coinbase trading price.
Coinbase (COIN) shares have fallen from a post-launch high of $342 to an all-time low of $41.23 each, down 8.9% in the past day.
Cathie Wood CEO of Ark Investment Management has been a long-time proponent of bitcoin and holds a large stake in Coinbase.
The current accumulation brings Ark’s total holdings to about 8.4 million shares, which equates to around 4.7% of Coinbase’s total outstanding shares.
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Wood's Coinbase shopping spree is at odds with Wall Street's sentiment towards Coinbase stock.
Coinbase has now just 14 buy-equivalent analyst recommendations, its lowest number since August 2021.
Wood is not just purchasing Coinbase shares, but has also added to Ark's various crypto-related interests.
Ark has increased its holding of Grayscale Bitcoin Trust shares, and Ark's Fintech Innovation arm purchased more than 200,000 shares of crypto bank Silvergate Capital Corp (SI) last week.
The accumulation of crypto-related equities by Ark comes as bitcoin feels the downward pull of short-selling pressure from institutional investors.
This week a CoinShares report revealed that institutional investors are betting against crypto in the wake of the FTX collapse.
The report showed that short investment products, which bet on the price of an asset to drop, accounted for 75% of all inflows on crypto derivative trading platforms.
The data shows that institutional investors are swamped with pessimism after FTX’s collapse.
FTX was once held aloft as a shining example of the crypto industry's creativity, efficiency, transparency and altruism.
However, the Bahamian-based firm was revealed to be anything but the above, apart from being creative with its bookkeeping.
The scandal from the island-based exchange has deepened after the discovery that Sam Bankman-Fried's parents and senior FTX executives purchased at least 19 properties worth nearly $121m in the Bahamas over the past two years.
According to Reuters, official property records show FTX's purchases on the offshore finance haven were luxury beachfront homes, including seven condominiums in an expensive resort community called Albany, costing almost $72 million.
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