A pullback in crypto markets during the fourth quarter of 2025 weighed on several of Cathie Wood’s ARK exchange-traded funds (ETFs), revealing that the firm’s flagship funds are sensitive to digital asset performance.
According to ARK’s quarterly report released Wednesday, weakness in crypto-linked equities, led by Coinbase, emerged as a key drag on performance. The exchange was among the biggest detractors across ARK funds, including the ARK Next Generation Internet ETF (ARKW), ARK Blockchain & Fintech Innovation ETF (ARKF) and the ARK Innovation ETF (ARKK).
Coinbase’s shares declined more sharply than major cryptocurrencies during the quarter, underperforming both Bitcoin (BTC) and Ether (ETH) as spot trading volumes on centralized exchanges fell 9% quarter-on-quarter following October’s liquidation event, ARK noted.
“Despite hosting a product event that showcased its long‑term strategic ambitions, including plans for on‑chain equities, prediction markets, an AI‑powered portfolio advisor, and a broader rollout of its Layer 2 Base app, market conditions remained challenging,” ARK said about Coinbase.
Related: Cathie Wood says ARK’s $1.5M Bitcoin bull price hasn’t changed as markets eye rally
Roblox becomes next major drag on ARK ETFs
After Coinbase, Roblox was the second-largest detractor across several ARK ETFs in the quarter. Shares of Roblox fell during the quarter after the company posted strong third-quarter results, including 51% year-on-year bookings growth, but warned that operating margins would decline in 2026 due to higher spending on infrastructure and safety.
The stock also faced pressure after Russia banned the platform over child safety concerns, a move that affected roughly 8% of Roblox’s daily active users.
Notably, crypto exposure now accounts for about 13.7% of ARKW, 14.6% of ARKF, and about 7.4% of ARKK. Beyond Coinbase and Roblox, ARK’s top crypto-linked holdings include Robinhood Markets, Circle Internet Group, Block and spot Bitcoin exposure via the ARK 21Shares Bitcoin ETF.
According to data from Yahoo Finance, Coinbase started October trading at $346, but finished the year at $226, a nearly 35% drop. During the same period, Bitcoin lost 22% while Ether dropped by 28%, based on data from CoinMarketCap.
Related: Coinbase pulls support for crypto bill: ‘no bill’ better than ‘bad bill’
Wall Street turns bullish on Coinbase
Last week, Bank of America upgraded Coinbase from neutral to buy, citing the company’s expanding role in moving financial activity onchain and its evolution beyond trading toward what it described as an “everything exchange.”
The upgrade came after a similar move by Goldman Sachs, which earlier this month also initiated a buy rating, saying the recent pullback has left crypto-related stocks undervalued and potentially positioned for a rebound heading into early 2026.
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