Ark Invest buys $5.2 million of Circle shares, sells $15.9 million of its bitcoin ETF

Cathie Wood-led Ark Invest purchased 65,615 Circle shares for $5.2 million on Monday for the Next Generation Internet ETF (ARKW). Ark also sold $15.9 million of shares in its own spot bitcoin ETF, ARK 21Shares Bitcoin ETF (ARKB), from two investment funds. Ark continued adjusting fund allocations while bitcoin extended its decline from early October highs.

Ark's strategy limits each individual holding to no more than 10% of a fund's portfolio to preserve diversification. Ark is therefore likely to keep adjusting allocations if particular shares change significantly in value relative to other holdings. Ark's latest disclosures show that Circle Internet Group, Inc. (CRCL) ranked fifth in ARKW as of October 27. Circle represented 4.3% of ARKW, with a value of around $67.8 million. Tesla, Meta, Shopify and Amazon occupied the first four positions, in that order.

The Block's CRCL data show that Circle shares dropped 7.1% on Monday to close at $79.84. The Block's CRCL data also show that Circle shares were down 1.2% year-to-date. TradingView showed Circle shares falling 1.1% in Tuesday's premarket session.

ARKB remained among the 10 largest holdings in both ARKW and the ARK Blockchain and Fintech Innovation ETF (ARKF). ARKW's ARKB holding represented 3.7% of the fund and was worth approximately $58.2 million. ARKF's ARKB holding represented 3.8% of the fund and was worth approximately $29.1 million. The Block's ETF Tracker shows that ARKB has attracted around $1.1 billion in net inflows since its January 2024 launch. The Block's ETF Tracker puts ARKB's assets under management at $2.5 billion.

Bitcoin traded near $79,625 on Tuesday morning, below $80,000 amid renewed selling ahead of Wednesday's Federal Reserve interest rate decision. Bitcoin had fallen 8.7% from its October high of around $87,200.

LMAX Group market strategist Joel Kruger attributed recent crypto market weakness to increasing Middle East tensions, rising oil prices and inconsistent institutional demand. Kruger said thin weekend trading and leveraged liquidations intensified selling pressure. However, Kruger argued that macroeconomic factors explained the decline more than a fundamental shift in the outlook for digital assets.

Derive founder and CEO Nick Forster said traders were increasingly preparing for further losses. Forster said $80,000 had become the most actively traded bitcoin options strike on Derive. Put options represented 91% of roughly $32 million traded at that strike over the past week, indicating increased demand for protection against further declines.