Key Highlights
- Cathie Wood’s ARK Invest acquired 287,609 shares of CRCL valued at approximately $17.8M on Wednesday
- CRCL has plummeted more than 38% over the last 30 days, including a 15% decline across two trading sessions
- Circle’s exit from three Russell growth indexes on June 26 sparked the recent selloff
- New competitor Open USD debuted this week with support from BlackRock, Mastercard, Visa, and other major firms
- Bernstein continues to hold a $190 price objective for CRCL shares
Circle Internet Group (CRCL) has endured a challenging period recently. The company behind the USDC stablecoin saw its shares finish Wednesday’s session at $61.95, representing a decline of more than 38% over the previous 30 days. Cathie Wood’s ARK Invest viewed this weakness as an entry point.
Wood’s investment management firm acquired 287,609 shares of CRCL on Wednesday, distributed across three exchange-traded funds, representing approximately $17.82 million based on the day’s closing value.
The ARK Innovation ETF (ARKK) led the purchases with 210,343 shares. Meanwhile, the ARK Next Generation Internet ETF (ARKW) contributed 53,846 shares, while the ARK Fintech Innovation ETF (ARKF) rounded out the buying with 23,420 shares.
The purchase followed consecutive difficult trading days for CRCL. Shares declined 14.15% during Tuesday’s session before sliding another 1.09% on Wednesday to settle at $61.95. Combined, the stock experienced a 15% decline over just two days.
Factors Behind the Selloff
The downturn began when Circle was dropped from three Russell growth indexes on June 26 as part of the annual Russell reconstitution process. This development forced index funds and passive investment vehicles to liquidate their positions.
The stablecoin issuer was excluded from the Russell 1000 Growth Index, Russell 3000 Growth Index, and Russell Midcap Growth Index. When passive funds are compelled to sell, the resulting pressure can significantly impact share prices, which is exactly what occurred here.
Additional pressure emerged from another source. Open USD (OUSD), a competing stablecoin product, made its debut this week supported by more than 140 organizations, including heavyweight names like BlackRock, Coinbase, Ripple, Mastercard, and Visa. This development creates direct competition for Circle’s flagship USDC product.
Circle has responded to the challenges. The firm recently revealed a collaboration with Standard Chartered that will enable institutional investors to create and redeem USDC tokens. This announcement contributed to a 4.25% premarket gain on Thursday, pushing shares to $64.58.
Bernstein Maintains Bullish Outlook
Despite the significant decline, Bernstein analysts remain committed to their $190 price objective for CRCL. This target represents more than triple Wednesday’s closing value, indicating analysts believe the recent selloff has created an overcorrection.
ARK’s buying activity aligns with this perspective. Wood’s investment firm has consistently added cryptocurrency-adjacent companies to its holdings, including Coinbase, Robinhood, and Bullish, in addition to Circle.
During the same trading session, ARK purchased approximately 27,740 shares of Bullish (BLSH), valued at roughly $700,000.
Meanwhile, ARK continued reducing its stake in Alibaba (BABA), offloading 79,632 shares worth approximately $7.81 million. This sale represents part of a broader pattern of Alibaba disposals 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, illustrating the recent price deterioration.
