(Bloomberg) —
Coinbase Global Inc. rose in premarket trading on the second day of its highly-anticipated debut, following news that three funds at Cathie Wood’s Ark Investment Management bought shares of the biggest U.S. cryptocurrency exchange.
The stock traded at $361.98 at 4:16 a.m. in New York, up about 9% from their last close, but still lower than Wednesday’s opening price. After debuting at $381 in its direct listing on Nasdaq Wednesday, Coinbase climbed as high as $429.54 — sending the exchange’s valuation soaring above $112 billion — before quickly slipping back as Bitcoin fell from record highs.
Cathie Wood’s flagship Ark Innovation ETF, Ark Fintech Innovation ETF and Ark Next Generation Internet ETF bought a combined 749,205 shares of Coinbase, according to data released by the funds in an email. Shares in the first — Ark Innovation ETF (ticker ARKK) — also edged higher premarket.
Coinbase’s listing is seen pushing crypto even more into the mainstream of investing, exposing legions of potential buyers to digital tokens, which have grown into a $2 trillion industry in little more than a decade. Bitcoin, the original and biggest crypto coin, is valued at more than $1 trillion alone after a more than 800% surge in the past year.
At the closing price, Coinbase’s valuation on a fully diluted basis was about $86 billion. Given its size and visibility, Coinbase is likely to be popular with actively managed equity funds, particularly growth managers, essentially making a large swath of stock holders passive investors in crypto.
Growing mainstream acceptance of cryptocurrencies has spurred Bitcoin to a 120% rally since December, as well as lifting other tokens to record highs. That’s despite lingering concerns over their volatility and usefulness as a method of payment. Attention from regulators is poised to intensify as Coinbase becomes a public company.
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