Cathie Wood ARK Dumps $52M in Circle Stock: Strategic Profit Taking
Big news from the world of crypto investing! Cathie Wood ARK, the asset management firm known for its bullish stance on Bitcoin and innovation, has made a notable move regarding its investment in Circle, the issuer of the popular USDC stablecoin. Just 11 days after Circle began trading publicly on the New York Stock Exchange (NYSE), ARK Invest has decided to offload a significant portion of its holding.
Why Did ARK Invest Sell Circle Stock?
On Monday, ARK Invest sold 342,658 shares of Circle (CRCL) stock. This transaction was valued at approximately $51.7 million. This marks the first time ARK has divested its CRCL shares since acquiring a substantial position on Circle’s first day of public trading, June 5.
ARK initially bought around 4.49 million Circle shares across its three main funds. At the closing price on June 5, this initial purchase was valued at $373.4 million.
Circle’s Prominent Position in Cathie Wood ARK Funds
Despite the recent sale, Circle remains a key holding across ARK’s portfolio. The stablecoin issuer’s stock is a top asset in three of ARK’s prominent funds:
- ARK Innovation ETF (ARKK): Circle is the fifth-largest holding, representing roughly 6.6% of the fund’s total assets under management ($5.6 billion). Its position is valued at $387.7 million.
- ARK Next Generation Internet ETF (ARKW): CRCL shares account for about 6.7% of ARKW’s assets, totaling $124 million. It sits just behind Coinbase in terms of weight.
- ARK Fintech Innovation ETF (ARKF): In this fund, Circle holds a 6.7% weight, valued at $72 million.
This shows that even after selling over $51 million worth of CRCL shares, ARK still maintains significant exposure to the stablecoin issuer.
ARK’s Early Interest and Stablecoin Insights
ARK Invest was an early supporter of Circle’s public offering. Before its NYSE launch, ARK indicated interest in purchasing up to $150 million in Circle shares. This commitment increased as Circle’s IPO saw strong demand from investors, leading to multiple upsizings.
ARK’s research team has commented on the significance of Circle’s successful debut. They believe it highlights a positive shift in public perception regarding the crypto industry, particularly stablecoins.
According to ARK analysts, stablecoins like USDC are advancing the concept of property rights in the digital age. Building on Bitcoin’s foundation, stablecoins offer a less volatile digital asset with broader utility across different blockchains and financial platforms.
What Does This Mean for CRCL Shares and Stablecoins?
ARK’s decision to take profits relatively quickly after Circle’s debut could be seen as a strategic move. It allows them to lock in gains from their initial investment. While the term ‘dump’ might sound negative, in the context of large fund management, selling a portion of a holding is a common practice for portfolio rebalancing or securing profits.
The fact that ARK maintains such a large position in Circle underscores their continued belief in the stablecoin sector and Circle’s role within it. As the stablecoin market continues to evolve, the performance of CRCL shares and the strategies of major investors like ARK Invest will be closely watched.
Summary
Cathie Wood ARK has sold a batch of Circle (CRCL) shares worth over $51 million, taking profits just days after the stablecoin issuer went public. Despite this sale, Circle stock remains a major holding across ARK’s key funds, highlighting the firm’s ongoing confidence in the stablecoin space and Circle’s potential. This move provides insight into ARK’s portfolio management strategy following a successful IPO investment.
