Cathie Wood, CEO and chief investment officer of ARK Invest, has expressed her bullishness on Coinbase stock and her belief that Bitcoin will reach $1 million.
Wood’s fund, Ark Innovation (ARKK), recently added to its position in Coinbase shares following the Securities and Exchange Commission’s (SEC) lawsuit against Binance, one of Coinbase’s main competitors.
ARKK purchased nearly 330,000 shares of COIN on June 6, 2023, totaling around $17 million. Two other ETFs, Ark Fintech Innovation ETF and Ark Next Generation Internet ETF, also increased their positions in Coinbase. Currently, the average entry price for all three funds ranges from $272.75 to $282.93, with a total position value of $1.77 billion.
However, the trade has resulted in significant losses so far, as COIN is currently trading at $53.90.
Wood’s optimism stems from the belief that the SEC’s enforcement actions will make Coinbase the dominant cryptocurrency exchange in the United States.
She argues that the allegations against Coinbase and Binance differ, with Binance potentially facing more serious charges related to the violation of the Commodity Exchange Act and regulations of the Commodity Futures Trading Commission.
Wood believes that Coinbase will emerge victorious, positioning itself as the leading player in the market.
While some analysts share Wood’s view, others do not.
The consensus among analysts is a Hold rating, with an average price target of $58.49, representing a potential 12% increase from current levels. Notable analysts such as John Todaro and Atlantic Equities have provided more bullish price targets of $70 for COIN.
Coinbase also faces a lawsuit from the SEC regarding the trading and staking of unregistered securities.
There are concerns that the exchange may have engaged in illegal activities, including investing in projects it planned to list on its platform before their public availability.
Regarding Bitcoin, Wood reiterated her belief that it serves as a hedge against inflation and holds a $1 million price target. Despite concerns about deflation, she remains bullish on Bitcoin due to its function as an antidote to counterparty risk in the traditional financial system.
Wood highlighted the upcoming Bitcoin halving event and the current accumulation phase in the market.
In summary, Cathie Wood’s bullishness on Coinbase stock and her $1 million Bitcoin price target are based on her expectations of Coinbase becoming the dominant U.S. cryptocurrency exchange and Bitcoin’s ability to outperform in different market environments. However, analysts’ opinions on COIN vary, and there are potential legal and regulatory challenges for Coinbase to overcome.
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