tl;dr
Coinbase shares briefly rallied before falling 2.1% to $345.79 due to the U.S. Supreme Court rejecting Coinbase's appeal in a privacy case and ARK Invest selling $95 million in Coinbase stock during ETF rebalancing. The Supreme Court's decision upheld an IRS summons for user transaction data, denyin...
Crypto exchange Coinbase experienced a sharp market movement, rallying briefly before plunging 2.1% following a double setback from the U.S. Supreme Court's decision and a major fund rebalancing by ARK Invest. During midday trading, Coinbase shares were priced at $345.79, reflecting this decline.
The Supreme Court refused to hear Coinbase's appeal in Harper v. Faulkender, a case challenging an IRS "John Doe" summons aimed at reviewing user transaction data without specifying targets. Coinbase and privacy advocates had hoped the court would reconsider the "third-party doctrine" to extend similar privacy protections to crypto exchanges as those granted to cell phone service providers regarding client data.
Compounding Coinbase’s challenges, Cathie Wood's ARK Invest sold $95 million worth of Coinbase stock as part of its ETF portfolio rebalancing. ARK sold 77,956 shares from its ARK Innovation ETF (ARKK), 29,802 shares from the ARK Next Generation Internet ETF (ARKW), and 17,134 shares from the ARK Fintech Innovation ETF (ARKF). While such rebalancing is routine for fund management and doesn't necessarily signal a loss of confidence, this volume represented considerable selling pressure.
Despite this, Coinbase’s stock performance in Q2 was robust: shares more than doubled from an April 1 opening price of $172.82 to close June 30 at $350.49. The momentum carried into last week with a new all-time high closing at $375. Analysts from Benchmark and Bernstein have expressed strong bullish sentiment, calling Coinbase "transformative" and "misunderstood," with price targets of $402 and $510 respectively. William Blair’s analyst A. Jeffrey projects earnings gains of $1.33 per share for the upcoming report scheduled in early August, according to Nasdaq estimates.