Coinbase is now a top 10 holding for the ARK Innovation ETF after Cathie Wood's buying this week

Published Fri, May 21 20219:00 AM EDTUpdated Fri, May 21 202112:04 PM EDT

Cathie Wood's Coinbase buying has earned the cryptocurrency exchange a top 10 spot in the star fund manager's flagship ETF. Wood — founder of Ark Invest — purchased 216,518 shares of Coinbase worth $50.5 million on Thursday for the ARK Innovation ETF , according to the firm. The amount in based on Thursday's closing Coinbase price of $233.40 per share. She also purchased more than 38,000 shares for the ARK Fintech Innovation ETF . Ark has been buying the pullback in the crypto currency exchange all week, a common practice for the "disruptive innovation" investor. Wood has bought nearly $188 million of Coinbase in various funds since Monday. About $150 million of the Coinbase stake was bought in Ark Innovation — where Coinbase is now the 10th largest holding, accounting for nearly 3.5% of the ETF. Shares of Coinbase are down nearly 10% this week amid a rout in the price of bitcoin. The digital asset lost 30% if its value on Tuesday but has since recovered somewhat to the $40,776 per unit level, according to Coin Metrics. Coinbase — founded in 2012 as a way to simplify the purchase of bitcoin — hit the public markets by way of a direct listing last month. However, it is down more than 45% from its high, and shares have tumbled more than 21% in May as the price of bitcoin pulled back. Buying weakness in beaten-down growth stocks is commonplace for Wood. Any selling pressure in her highest-conviction picks usually results in millions of share purchases. The investor is sticking with her strategy despite the $1 billion outflows her fund has seen in the past month, according to FactSet. Wood told CNBC in March that Ark is "becoming more and more optimistic about our portfolios in this sell-off." "We are getting great opportunities" in the sell-off to buy the pure play names in the funds, Wood said. "When we get opportunities like this to invest in pure plays instead of more mature plays...we will move back into pure plays." A longtime bitcoin bull, Wood told Bloomberg TV on Wednesday that she still expects the digital asset to reach $500,000. However, she said the pullback in the price of bitcoin could help the prospects for an Ark bitcoin ETF. Shares of Coinbase fell nearly 3% on Friday. Wood is not worried about this period of consolidation in innovation stocks, she told Bloomberg. "If our research is correct, no promises, we believe our portfolios will more than triple over the next five years, so that's more than a 25% annual rate of return," Wood told Bloomberg TV. "These innovation platforms have hit escape velocity. There is no turning back." The Ark Innovation ETF is down more than 33% from their high and nearly 15% year-to-date.

Monitors display Coinbase and Bitcoin signage during the company's initial public offering at the Nasdaq MarketSite in New York, April 14, 2021.

Michael Nagle | Bloomberg | Getty Images

Cathie Wood's Coinbase buying has earned the cryptocurrency exchange a top 10 spot in the star fund manager's flagship ETF.

Wood — founder of Ark Invest — purchased 216,518 shares of Coinbase worth $50.5 million on Thursday for the ARK Innovation ETF, according to the firm. The amount in based on Thursday's closing Coinbase price of $233.40 per share.

She also purchased more than 38,000 shares for the ARK Fintech Innovation ETF.

Ark has been buying the pullback in the crypto currency exchange all week, a common practice for the "disruptive innovation" investor.

Wood has bought nearly $188 million of Coinbase in various funds since Monday. About $150 million of the Coinbase stake was bought in Ark Innovation — where Coinbase is now the 10th largest holding, accounting for nearly 3.5% of the ETF.