Ark Invest Buys $16 Million in Circle as Stock Dips 20%

TL;DR

• Ark Invest bought over $16 million worth of shares in Circle on Tuesday.

• The acquisition comes after Circle’s stock dipped 20% on Tuesday amid a flurry of news that could impact its stablecoin business.

Ark Invest Doubles Down on Circle Amid Negative Legislation

Cathie Wood-led Ark Invest purchased additional shares of Circle Internet Group across its exchange-traded funds on Tuesday. This latest development comes as the stock of the USDC issuer dipped by 20%.

In its trade filing on Tuesday, Ark Invest revealed that it bought a total of 161,513 shares in Circle via ARKK, ARKW, and ARKF. Based on Circle's closing price of $101.17, the purchase was worth $16.34 million.

This latest development is a strategic buy of the dip following Circle's 20% slide on Tuesday, which came amid a wave of new developments affecting the stablecoin issuer. 

Circle’s 20% dip on Tuesday came after a draft language for the U.S. Clarity Act circulated among industry insiders, signaling a more restrictive shift that could ban yield payments for simply holding stablecoins.

Analysts attributed Circle's intraday drop to the negative impact this may have on Circle's USDC business.

Furthermore, onchain investigator ZachXBT published a post on Tuesday claiming that Circle had frozen the USDC balances of 16 hot wallets tied to various businesses. 

The onchain analyst added that the affected businesses were linked to an ongoing U.S. civil case. 

While Circle is facing regulatory challenges, its biggest rival, Tether, announced on Tuesday that it is proceeding with its first full financial audit. Tether has hired a Big Four accounting firm to audit its books, a move many consider a challenge to Circle's position as the transparent and compliant alternative to Tether.

Circle’s shares recovered 1.5% in after-hours trading on Tuesday. Despite that, the stock is up 65% in the past month but down 23% over the past six months.

Ark Invest also reduced its holdings of Bullish. The firm announced on Tuesday that it sold 41,064 shares of Bullish, worth $1.53 million based on Tuesday's closing price of $37.37.