ARK buys $13.9m in Circle shares as analysts flag deterioration
Cathie Wood’s ARK Invest has spent $13.9 million expanding its position in struggling stablecoin issuer Circle, defying analysts who warn the company’s fundamentals are worsening.
ARK Invest purchased 220,000 shares of Circle Internet Group on Tuesday, adding to a substantial accumulation in the stablecoin issuer this month. The $13.9 million buy, executed across three actively managed funds at a closing price of $63.22, brought ARK’s total disclosed July acquisitions to 725,517 shares. This follows previous purchases of 287,609 shares on July 1 and 217,896 shares on July 9.
These consecutive trades have significantly cemented Circle as a core holding within ARK’s primary exchange-traded funds. Circle now represents 3.35% of the ARK Innovation ETF, making it the fund’s ninth-largest position with an estimated value of $218 million. It holds an even heavier weight in the ARK Fintech Innovation ETF, where it accounts for 4.37% of assets and ranks as the seventh-largest holding at roughly $33 million.
ARK’s aggressive accumulation contrasts sharply with Circle’s recent market performance and shifting analyst sentiment. The stock has fallen 22% year-to-date and currently trades roughly 76% below its post-initial public offering peak. By steadily increasing its exposure throughout this descent, the investment manager is making a high-conviction contrarian bet on a recovery.
That optimism is not universally shared across the crypto sector. Digital asset research firm 10x Research dropped its buy recommendation on Tuesday after the stock slipped below $80, a level it previously viewed as attractive. The firm stated that Circle’s fundamentals have "meaningfully deteriorated," pointing specifically to a drop in active addresses and slower overall activity on the USDC network.
Network metrics show USDC’s market capitalization has declined roughly 3% since January to sit at $73 billion, according to CoinGecko. While this represents a 17% increase compared to a year ago, the recent stagnation has given analysts pause. 10x Research noted that the stock’s pullback could eventually present a long-term buying opportunity, but warned it might equally mark the start of a prolonged downturn. For ARK, the divergence highlights a steadfast belief in the underlying business despite immediate headwinds.
