ARK Invest Acquires Additional 220K Circle Shares as Stock Continues Decline
ARK Invest, led by Cathie Wood, purchased $13.9 million in Circle shares on Tuesday, bringing total July acquisitions to 725,517 shares as the stock faces continued downward pressure.
ARK Invest, under the leadership of Cathie Wood, continues to increase its stake in Circle, the issuer of USDC stablecoin, despite ongoing challenges facing the company's stock performance.
On Tuesday, ARK acquired an additional 220,000 shares of Circle Internet Group (CRCL) distributed across three of its actively managed exchange-traded funds, as revealed in the firm's daily trade disclosure examined by Cointelegraph.
Calculated using Circle's closing price of $63.22 on the New York Stock Exchange for Tuesday, the value of ARK's most recent acquisition came to approximately $13.9 million.
Shares of Circle have experienced a decline of approximately 22% since the beginning of the year and are trading around 76% lower than their peak following the initial public offering (IPO).
ARK discloses 725,000 Circle shares in July purchases
The most recent acquisition by ARK increased its total disclosed Circle share purchases for July to 725,517, coming after earlier transactions of 287,609 shares purchased on July 1 and 217,896 shares acquired on July 9.
Recent trade disclosure documents indicate that ARK has been steadily increasing its Circle holdings within its flagship funds notwithstanding the stock's extended downturn, demonstrating the investment firm's strong belief in the USDC issuer's prospects.
According to the latest data available as of Wednesday, Circle represents 4.37% of the ARK Fintech Innovation ETF (ARKF), establishing it as the fund's seventh-largest position. The value of ARKF's Circle holdings stood at approximately $33 million based on the most recent holdings information.
Additionally, Circle constitutes 3.35% of the flagship ARK Innovation ETF (ARKK), where it holds the position of ninth-largest holding, with a value of roughly $218 million.
Analysts see growing risks for Circle
The latest acquisition by ARK occurred as market analysts began reevaluating Circle's prospects in light of a significant drop in the company's share price.
10x Research, a digital asset research platform, announced it has removed Circle from its buy recommendations after the stock dropped below the $80 threshold. In a Tuesday report, the firm stated that while it had previously considered CRCL attractive at prices below that threshold, it now believes the company's fundamental outlook has "meaningfully deteriorated."
The research analysis also highlighted reduced USDC activity levels, including a decrease in the number of active addresses, as an area of concern for Circle's business.
The market capitalization of USDC has dropped by roughly 3% year-to-date, standing at $73 billion as of publication time, based on data from CoinGecko. However, despite this recent downturn, the stablecoin's market capitalization continues to be approximately 17% above its level from one year ago.
Nevertheless, 10x Research noted that a positive outlook for Circle still exists, suggesting that the stock's recent price decline might represent either an attractive entry point for long-term investors or the beginning of an extended period of downward movement.