ARK’s fourth-quarter report shows Coinbase trailing innovation ETFs as spot volumes decline, even as AMD, Shopify and Rocket Lab pare losses and Coinbase doubles down on its all-exchange pivot.
Summary
- Coin base was the biggest negative for ARK in the fourth quarter, after spot volumes fell 9% quarter-on-quarter and a liquidation event on October 10 wiped out $21 billion in debt, putting pressure on crypto-linked holdings.
- Winners included AMD, Shopify and Rocket Lab, which united on AI partnerships, OpenAI integrations and an $816 million satellite warning satellite contract that expanded ARK’s space exposure.
- Coinbase introduces stock trading, tokenized equity, and Kalshi-powered prediction markets to become an ‘everything exchange’, a strategy that Goldman now supports with a Buy rating.
Coinbase Global Inc. represented the largest negative impact of ARK Invest’s innovation-focused stock market funds in the fourth quarter of 2025, according to the company’s quarterly report released for the period ending December 31.
The outlook for cryptocurrency and Coinbase fell in December
Shares of the cryptocurrency exchange fell sharply during the quarter as spot trading volumes on centralized exchanges fell 9% quarter-on-quarter, contributing to the underperformance of Cathie Wood’s flagship funds. The quarter followed a liquidation event on October 10 that eliminated $21 billion in leveraged positions in the cryptocurrency sector, according to market data.
Coinbase hosted a product event this quarter showcasing strategic initiatives including plans for on-chain equities, prediction markets and an AI-powered portfolio advisor.
Roblox Corp. joined Coinbase as a major negative after reporting third-quarter bookings growth of 51% year-over-year, but forecast declining operating margins in 2026 due to higher infrastructure and security costs. Russia’s ban on Roblox over child safety concerns removed about 8% of the platform’s total daily active users, although the region accounted for less than 1% of total revenue, according to the company.
Advanced Micro Devices Inc. emerged as the quarter’s strongest contributor after announcing AI partnerships, including a multi-year deal with OpenAI and a collaboration with Oracle Corp. for a public AI supercluster. AMD’s third-quarter earnings reflected 36% year-over-year revenue growth, driven by demand in the data center and gaming segments, the company reported.
Shopify Inc. rebounded after news of its integration with OpenAI, which allowed ChatGPT users to checkout directly in chat. The company reported third-quarter earnings that showed 32% year-on-year growth in both gross merchandise value and revenue.
The shares of Rocket Lab USA Inc. soared after multiple launch deals, including an $816 million contract to deliver 18 missile warning, tracking and defense satellites to low Earth orbit, representing the largest contract in the company’s history.
Four of ARK’s actively managed ETFs underperformed broad global stock indexes in the fourth quarter, while two outperformed or delivered mixed results, the company’s report said. Wood argues that the innovation space is recovering and being revalued, noting that headwinds that previously put pressure on disruptive technologies are turning into structural tailwinds.
Coinbase CEO Brian Armstrong announced earlier in January that the exchange will pursue an “all-exchange” strategy by 2026, combining cryptocurrency, equities, prediction markets and commodities into spot, futures and options products. The plan positions Coinbase to compete with traditional brokers while expanding beyond digital assets into tokenized securities and event-based markets.
“The goal is to make Coinbase the #1 financial app in the world,” Armstrong wrote, adding that the company is investing in product quality and automation to support its expansion.
The exchange transitioned to prediction markets in late 2025, in partnership with Kalshi, a federally regulated platform approved by the U.S. Commodity Futures Trading Commission. Leaked screenshots in November revealed a Coinbase-branded prediction interface that supports USDC or USD trading across economics, politics, sports and technology categories. The product operates through Coinbase Financial Markets, the exchange’s derivatives division, and leverages Kalshi’s regulatory framework to offer event contracts structured as yes-or-no questions.
Coinbase plans to issue tokenized shares internally rather than through third-party partners, marking a departure from competitors who rely on third-party providers for stock tokens.
Goldman Sachs upgraded Coinbase from neutral to buy on Jan. 6, raising its 12-month price target and citing growing confidence in the company’s diversification strategy. Analyst James Yaro highlighted Coinbase’s efforts to expand beyond spot cryptocurrency trading, citing initiatives in infrastructure, tokenization and prediction markets as potential growth drivers.
David Duong, the exchange’s head of investment research, stated that the exchange expects broader cryptocurrency adoption in 2026, driven by greater participation from retail and institutional investors as regulatory clarity improves.
Coinbase has threatened to withdraw support for the pending draft Crypto Market Structure Bill following last-minute changes that the industry says would effectively end decentralized finance, according to company statements. The legislation faces bipartisan disagreements and pressure from the banking industry.
