Benzinga - Ark Investment Management CEO Cathie Wood declared that Coinbase Inc (NASDAQ:COIN), the world’s second-largest cryptocurrency exchange, is poised to benefit given that rival exchange, Binance Holdings, is facing regulatory issues in the U.S.
What Happened: Wood believes the disappearance of Binance, their main competition, will give Coinbase a stronger foothold in the market.
"We have Binance under increasing regulatory scrutiny for more criminal activities, fraud being one of them, therefore we have the competition for Coinbase disappearing, so that's a good thing longer term for Coinbase," Wood told Bloomberg on Thursday.
This comes as both exchanges face regulatory crackdowns over allegedly peddling unregistered securities, with the Securities and Exchange Commission (SEC) suing them just this week.
On Tuesday, despite Coinbase’s stock experiencing a 12% decline following the SEC lawsuit against the firm, Wood’s ARK Investment Management bought over 419,000 shares at an estimated valuation of over $21.6 million.
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Why It Matters: According to Wood, Binance is undergoing increasing regulatory scrutiny for several criminal activities, with fraud being one of them.
However, Coinbase is not being accused of any criminal activities despite questions regarding its status as a security and staking practice. Despite this, Ark Invest is still the fourth-largest holder of Coinbase and has added to its stake for nearly a year.
Meanwhile, Wood still has faith in her target for Bitcoin (CRYPTO: BTC), valuing the cryptocurrency at $1 million. She believes that the more uncertainty and volatility there is in global economies, the more confident Ark Invest becomes in the token.
Price Action: At the time of writing, BTC was trading at $26,411.75, down 2%, in the last 24 hours, according to Benzinga Pro.
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