Key Highlights
- Cathie Wood’s ARK Invest acquired 287,609 shares of CRCL worth approximately $17.8M on Wednesday
- CRCL stock has plummeted more than 38% over the last month, including a 15% decline across two trading sessions
- Circle’s exclusion from three Russell growth indexes on June 26 sparked the recent selloff
- New competitor Open USD emerged this week with major backing from BlackRock, Visa, Mastercard and other industry giants
- Bernstein continues to hold a bullish $190 price target for CRCL shares
The past month has been challenging for Circle Internet Group (CRCL). Shares of the stablecoin company finished Wednesday’s session at $61.95, marking a decline of more than 38% over the trailing 30 days. Cathie Wood’s ARK Invest viewed this weakness as an attractive entry point.
Wood’s investment firm accumulated 287,609 shares of CRCL throughout Wednesday’s trading across three exchange-traded funds, representing an investment of approximately $17.82 million based on the day’s closing price.
ARK Innovation ETF (ARKK) led the buying activity with 210,343 shares. ARK Next Generation Internet ETF (ARKW) contributed an additional 53,846 shares, while ARK Fintech Innovation ETF (ARKF) acquired 23,420 shares.
This accumulation followed a particularly difficult stretch for CRCL shares. The stock tumbled 14.15% during Tuesday’s session before sliding an additional 1.09% on Wednesday to settle at $61.95. Combined, this represents a sharp 15% decrease over just two trading days.
Why Circle Stock Sold Off
The downturn began after Circle was excluded from three Russell growth indexes during the annual reconstitution process on June 26. This forced index-tracking funds and passive investment vehicles to liquidate their positions.
Specifically, Circle was removed from the Russell 1000 Growth Index, Russell 3000 Growth Index, and Russell Midcap Growth Index. When passive funds are required to sell due to index changes, the resulting pressure can significantly impact share prices—exactly what happened with CRCL.
Adding to the pressure, Open USD (OUSD), a competing stablecoin product, made its debut this week with substantial support from more than 140 organizations, including major players like BlackRock, Coinbase, Ripple, Mastercard, and Visa. This development introduces meaningful competition to Circle’s flagship USDC stablecoin.
Circle has responded with strategic initiatives. The company recently unveiled a collaboration with Standard Chartered that will enable institutional investors to mint and redeem USDC tokens. This announcement helped CRCL shares rebound 4.25% to $64.58 during Thursday’s premarket session.
Analyst Outlook Remains Optimistic
Despite the significant downturn, Bernstein analysts continue to maintain their $190 price target for CRCL. This valuation represents more than triple Wednesday’s closing price, indicating that Wall Street professionals believe the recent decline has been excessive.
ARK’s buying activity aligns with this optimistic perspective. Wood’s firm has consistently increased exposure to cryptocurrency-related companies in its portfolios, including positions in Coinbase, Robinhood, and Bullish, in addition to Circle.
During the same trading session, ARK also acquired roughly 27,740 shares of Bullish (BLSH), representing an investment of about $700,000.
Meanwhile, ARK continued reducing its Alibaba (BABA) holdings, offloading 79,632 shares valued at approximately $7.81 million. This sale is part of a broader pattern of Alibaba divestment by ARK, with tens of millions of dollars in sales occurring over recent trading sessions.
According to Benzinga Edge rankings, CRCL currently holds a Momentum score in the 2nd percentile, reflecting the considerable downward pressure on the stock’s price action.
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