ARK ETFs Face Q4 Setback with Coinbase and Roblox Under Pressure

TLDR

• ARK ETFs recorded losses in Q4 2025 as crypto-linked assets declined in value.
• Coinbase emerged as the top detractor from multiple ARK ETFs during the quarter.
• The stock fell by nearly 35 percent while Bitcoin and Ether declined by 22 and 28 percent respectively.
• ARK reported that Coinbase underperformed due to reduced spot trading activity in the crypto market.
• Despite new product announcements, Coinbase’s performance did not improve during the quarter.
• ARK highlighted that Coinbase introduced plans for onchain equities and an AI-powered portfolio advisor.

A downturn in crypto markets during Q4 2025 negatively affected ARK ETFs as core holdings like Coinbase and Roblox declined together. ARK Invest’s quarterly report confirmed a direct impact on performance from crypto-linked equities, especially in their top internet and innovation ETFs. Despite broader strategic efforts by Coinbase, trading volumes and investor sentiment weakened toward the year-end.

Coinbase Declines Sharply Despite Strategic Announcements

Coinbase emerged as the largest detractor from ARK ETFs during the final quarter, underperforming both Bitcoin and Ether across the board. According to ARK’s report, the exchange’s stock dropped nearly 35%, starting October at $346 and ending December at $226. During the same timeframe, Bitcoin fell by 22% and Ether by 28%, based on CoinMarketCap data.

ARK stated, “Market conditions remained challenging,” even as Coinbase outlined strategic moves, including an AI advisor and Base Layer 2 rollout. The company also introduced plans for on-chain equities and prediction markets during a product event in late 2025. However, these long-term efforts failed to offset the decline in spot trading volume on centralized exchanges.

Trading volumes dropped 9% quarter-on-quarter following October’s liquidation event, according to ARK’s disclosure. Coinbase’s underperformance weighed heavily on the ARK Innovation ETF (ARKK), ARK Next Generation Internet ETF (ARKW), and ARK Fintech Innovation ETF (ARKF). Collectively, these funds hold some of the largest crypto-related positions in ARK’s portfolio.

Roblox Follows as Second-Largest Detractor

Roblox was the second-biggest drag on ARK ETFs during the quarter, despite reporting strong third-quarter bookings growth of 51% year-on-year. However, the company warned of narrowing operating margins in 2026 due to increased investment in infrastructure and platform safety.

ARK highlighted that regulatory issues also played a role in the decline of Roblox’s stock. Russia banned the gaming platform over child safety concerns, affecting 8% of its daily active user base. The decision added pressure to the stock, which was already struggling with investor concerns about rising costs.

ARK’s exposure to Roblox spans multiple funds, including ARKK and ARKW, making the impact widespread. These setbacks aligned with weaker performance across other consumer-tech holdings. The combination of regulatory and margin pressures outweighed the platform’s strong user and revenue growth.

Broader Crypto Exposure Continues to Weigh on ARK ETFs

Crypto exposure made up 13.7% of ARKW, 14.6% of ARKF, and 7.4% of ARKK, according to ARK’s latest filing. The funds also include holdings in Robinhood Markets, Circle Internet Group, Block, and the ARK 21Shares Bitcoin ETF. This broad exposure left the ETFs vulnerable to crypto’s late-year downturn.

Despite a weak quarter, Coinbase received upgrades from major banks in early January. Bank of America upgraded the stock from neutral to buy, citing long-term onchain potential. Goldman Sachs also initiated a buy rating, arguing that crypto-linked stocks appeared undervalued heading into 2026.

ARK acknowledged that Coinbase’s underperformance was more severe than other crypto assets. The decline occurred even as the company promoted its broader vision to become an “everything exchange.” Still, short-term market pressures eclipsed long-term innovation plans across crypto-exposed positions.

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