New York (CNN Business)Ark Invest's Cathie Wood, known for her bullishness on momentum stocks, especially Tesla, is making another big bet: This time, on Coinbase Global.
Three of Ark's funds bought a combined $246 million stake in the cryptocurrency giant on its first day of trading Wednesday.
In total, Ark Invest bought nearly 750,000 Coinbase shares, according to data released on the firm's website. Shares of Coinbase rose more than 30% in their market debut and were up another 5% in early trading Thursday.
More than two-thirds of Ark's stake was purchased by the company's flagship Ark Innovation (ARKK) exchange-traded fund, while the remaining shares were split between the Ark Next Generation (ARKW) and Ark Fintech Innovation (ARKF) ETFs.
Ark funds sold some positions in Tesla (TSLA) as well Wednesday, presumably to free up cash for the Coinbase purchase. But Tesla remains by far the top holding in several Ark funds, including making up more than 10% of the Ark Innovation ETF.
Many investors are bullish on Coinbase because they see the trading exchange as the big winner in the rapidly growing business of buying and selling bitcoin, ethereum and other cryptocurrencies. Coinbase had about $223 billion in assets on its platform as of the end of March, roughly 11% of the entire $2 trillion plus cryptocurrency market.
Some analysts echoed that sentiment this week after Coinbase's debut.
"We believe COIN, the most popular consumer-facing cryptocurrency exchange in the U.S., is positioned to be a primary beneficiary of the increased adoption of Bitcoin and other digital assets as it continues to scale in the U.S. and internationally," Mark Palmer, BTIG managing director and fintech analyst, said in a report Thursday.
Palmer initiated coverage of Coinbase with a "buy" rating and issued a $500 price target on the stock. That's more than 50% above Coinbase's closing price Wednesday.
Gil Luria, the director of research at D.A. Davidson, is even more bullish. Luria started Coinbase coverage with a "buy" and put a $650 price target on shares, nearly double current levels.
Luria called Coinbase the "standard bearer" for the burgeoning cryptocurrency industry.
"We believe Coinbase emerged as a leader in facilitating the onramp from government currency into crypto because of its superior user experience, security and strong compliance," Luria wrote.
