Celebrity investor Cathie Wood's company, Ark Invest, recently sold $21 million worth of Coinbase shares as the cryptocurrency exchange's stock surged by 10% on Monday. This move saw Ark Invest divesting 74,291 Coinbase shares spread across three of its exchange-traded funds (ETFs) as per the latest trading disclosure.

The bulk of the shares, amounting to 57,652 and valued at $16.1 million, were offloaded from Ark's Innovation ETF (ARKK). Furthermore, 12,544 shares from the Next Generation Internet ETF (ARKW) worth $3.5 million and 4,095 shares from the Fintech Innovation ETF (ARKF) valued at $1.2 million were also sold.

This recent sale comes after a series of divestments last week coinciding with Coinbase's stock reaching new yearly highs, with the shares valued at over $100 million. Ark Invest's investment approach focuses on maintaining a diversified portfolio by ensuring that no single holding exceeds 10% of the ETF's total assets.

Therefore, if Coinbase's stock price continues its upward trend, Ark Invest is likely to adjust its fund allocations to maintain the desired balance within its investment strategy.

Reason behind ARK invest's decision to sell coinbase shares

The reason behind Ark Invest's decision to sell Coinbase shares is primarily driven by profit-taking and portfolio rebalancing strategies. Ark Invest, led by Cathie Wood, has been actively selling Coinbase shares to secure profits as the cryptocurrency exchange's stock price surged and reached new highs. This selling activity is part of Ark's investment approach to adjust its fund allocations in response to the significant increases in Coinbase's value. Despite being a strong supporter of Coinbase, Ark Invest strategically sells portions of its holdings to lock in profits, especially after substantial price gains. This approach allows Ark to maintain a diversified portfolio by ensuring that no single holding exceeds 10% of the ETF's total assets. Additionally, the decision to sell Coinbase shares aligns with Ark's goal of optimizing performance and managing risk, reflecting a calculated adjustment rather than a lack of confidence in Coinbase's long-term potential.