Key Takeaways
- Cathie Wood’s ARK Invest acquired 287,609 Circle shares valued at approximately $17.8M on Wednesday
- CRCL has plummeted more than 38% over the last 30 days, including a 15% decline across two consecutive sessions
- Circle’s removal from three Russell growth indexes on June 26 sparked the selloff
- New competitor Open USD entered the market this week with support from BlackRock, Mastercard, Visa and over 140 other firms
- Bernstein continues to project a $190 price target for CRCL shares
Circle Internet Group (CRCL) is experiencing turbulent market conditions. The cryptocurrency stablecoin company’s shares settled at $61.95 on Wednesday, representing a decline exceeding 38% over the previous month. Cathie Wood’s ARK Invest viewed this weakness as a strategic entry point.
Wood’s investment firm accumulated 287,609 shares of CRCL on Wednesday, distributed across three exchange-traded funds, totaling approximately $17.82 million based on closing prices.
The ARK Innovation ETF (ARKK) accounted for the majority of the purchase with 210,343 shares. Meanwhile, the ARK Next Generation Internet ETF (ARKW) contributed 53,846 shares to the transaction, while the ARK Fintech Innovation ETF (ARKF) acquired 23,420 shares.
This acquisition followed consecutive difficult trading days for CRCL investors. Shares tumbled 14.15% during Tuesday’s session before declining an additional 1.09% on Wednesday to settle at $61.95. The combined two-day loss totaled 15%.
Catalysts Behind the Selloff
The downward pressure began when Circle was eliminated from three Russell growth indexes on June 26 as part of the annual Russell reconstitution process. This forced index funds and passive investment vehicles to liquidate their positions.
Specifically, Circle was dropped from the Russell 1000 Growth Index, Russell 3000 Growth Index, and Russell Midcap Growth Index. The mandatory selling from passive investment strategies typically creates significant downward pressure on stock prices.
Additional competition emerged simultaneously. Open USD (OUSD), a newly launched rival stablecoin, debuted this week with endorsements from more than 140 organizations, including major players like BlackRock, Coinbase, Ripple, Mastercard, and Visa. This development creates immediate competitive challenges for Circle’s USDC offering.
Circle has responded proactively. The firm recently unveiled a strategic partnership with Standard Chartered enabling institutional investors to mint and redeem USDC directly. This announcement helped CRCL rebound 4.25% to $64.58 during Thursday’s premarket session.
Wall Street Remains Optimistic
Notwithstanding the significant price decline, Bernstein analysts maintain their $190 price target on CRCL shares. This projection represents more than triple Wednesday’s closing price, indicating analysts believe the recent selloff has been excessive.
ARK’s acquisition aligns with this perspective. Wood’s investment vehicles have consistently added cryptocurrency-related holdings to their portfolios, including positions in Coinbase, Robinhood, and Bullish, in addition to Circle.
During the same trading session, ARK also purchased approximately 27,740 shares of Bullish (BLSH), valued at roughly $700,000.
Conversely, ARK continued reducing its Alibaba (BABA) holdings, disposing of 79,632 shares worth approximately $7.81 million. This continues a pattern of substantial Alibaba liquidations totaling tens of millions of dollars throughout the past week.
According to Benzinga Edge rankings, CRCL’s Momentum score currently registers in the 2nd percentile, reflecting the recent price deterioration.
