ARK Buys 725K Circle Shares in July Despite Sell-Off

Cathie Wood’s ARK Invest is doubling down on its bet on USDC issuer Circle even as the company’s stock remains under pressure.

ARK bought another 220,000 shares of Circle Internet Group (CRCL) across three of its actively managed exchange-traded funds on Tuesday, according to the company’s daily trade disclosure reviewed by Cointelegraph.

Based on Circle’s Tuesday closing price of $63.22 on the New York Stock Exchange, ARK’s latest purchase was worth about $13.9 million.

Circle shares were down about 22% year-to-date and roughly 76% below their post-initial public offering (IPO) peak.

ARK discloses 725,000 Circle shares in July purchases

ARK’s latest buy brought its disclosed July acquisitions of Circle shares to 725,517, following previous buys of 287,609 shares on July 1 and 217,896 shares on July 9.

The latest trade disclosures show ARK has consistently added to its Circle position across its flagship funds despite the stock’s prolonged decline, underscoring the investment manager’s conviction in the USDC issuer.

Source: ARK Invest

As of Wednesday, Circle accounted for 4.37% of the ARK Fintech Innovation ETF (ARKF), making it the fund’s seventh-largest holding. ARKF’s Circle position was valued at about $33 million, according to its latest holdings data.

Related: USDC issuer Circle wins final approval for US national trust bank charter

Circle also represented 3.35% of the flagship ARK Innovation ETF (ARKK), where it ranked as the fund’s ninth-largest holding, worth about $218 million.

Analysts see growing risks for Circle

ARK’s latest purchase came as analysts reassessed Circle’s outlook following a sharp decline in the company’s stock price.

Digital asset research platform 10x Research said it no longer considers Circle a buy after the stock fell back below $80. In a report published Tuesday, the company said it previously viewed CRCL as attractive below that level but now believes Circle’s fundamentals have “meaningfully deteriorated.”

Source: 10x Research

The research report also pointed to slower USDC activity, including a decline in active addresses, as a concern for Circle.

Related: USDT wins payments, USDC wins DeFi as stablecoins diverge: Dune

USDC’s market capitalization has declined roughly 3% year-to-date to $73 billion at the time of publication, according to CoinGecko. Despite the recent decline, the stablecoin’s market capitalization remains about 17% higher than a year ago.

Still, 10x Research said a bullish case for Circle remains, adding the stock’s recent decline could either present a long-term buying opportunity or mark the start of a more prolonged downturn.

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