ARK Invest Sells $60 Million in Crypto Stocks Before SEC Token Exemption

Cathie Wood's ARK Invest sold approximately $60 million in crypto-linked equities during a weekly rally that lifted Coinbase shares, days before the Securities and Exchange Commission announced a new innovation exemption for tokenized assets. The portfolio reduction included positions in Circle, Coinbase, Bitmine, and Bullish, as well as a portion of ARK's spot bitcoin exchange-traded fund.

The regulatory development arrived four days after the sales. The SEC's five-year Innovation Exemption permits platforms to trade tokenized U.S. equities without undergoing full exchange registration, a structural change that Coinbase has long sought. The announcement coincided with a sharp rise in Coinbase stock, which closed at $194.25 on September 18. The stock gained 10.84% for the week and 21.25% for the month, although it remained down 43.39% over the previous year.

Fundamentals for Coinbase have shown strain despite the recent price action. Second-quarter 2026 revenue totaled $1.22 billion, a decrease of 18.5% from the same period last year and below consensus estimates. The company reported a GAAP loss of $1.36 per share, contrasting with an estimate of $0.23. Services revenue held steady at $555 million, accounting for 48% of net revenue and providing a defensive buffer that pure-play peers do not possess.

The broader crypto market remains under pressure. Bitcoin is down 29.03% year over year at $81,820.97, a decline that weighs on Strategy and miner MARA Holdings. Strategy trades as a levered proxy for Bitcoin, while MARA Holdings offers exposure to Bitcoin beta without a subscription revenue cushion. Robinhood Markets competes for the same retail trading share that Coinbase CEO Brian Armstrong is pursuing. Armstrong told analysts that Bitcoin will return strongly, noting that the asset continues to move through cyclical patterns.

Market sentiment regarding regulatory clarity remains cautious. Prediction markets assign a 0.066 probability to the Clarity Act becoming law in 2026, with the negative outcome at 0.934. A Reddit post noting a failed Senate vote on the act drew 5,176 upvotes. Conversely, Polymarket assigns a 0.555 probability that Coinbase will lead in the U.S. market for tokenized equities.

Coinbase's market share reached an all-time high of 10.3%, and the company has reported positive adjusted EBITDA for 14 consecutive quarters. The bull case centers on this rising share and the potential of tokenized equity optionality. The bear case highlights the sharp revenue decline and the headwinds facing the Clarity Act, suggesting that ARK's exit may signal that the easy gains from the regulatory trade have already been realized.