Ark Invest reduces Circle stake, dumps nearly $97M in stock

Cathie Wood’s Ark Invest has sold nearly $97 million worth of shares in Circle Internet Group Inc. over two consecutive days this business week, reducing its position in the stablecoin issuer just as its stock surged by almost 40% in the past five days. 

Ark Invest’s latest sale on Tuesday amounted to $44.76 million in CRCL shares, following a $51.7 million divestment on the previous day. Altogether, Ark Invest sold 342,658 Circle shares, split across three of its actively managed exchange-traded funds (ETFs), including the ARK Innovation ETF (ARKK), ARK Next Generation Internet ETF (ARKW), and ARK Fintech Innovation ETF (ARKF).

According to fund disclosures, ARKK offloaded 196,367 shares, ARKW sold 92,310 shares, and ARKF trimmed 53,981 shares from its holdings.

Despite the sizable reduction, Ark holds a substantial stake in the USDC issuer, with over 4.15 million shares valued at approximately $628 million, well above its initial $373 million investment.

Ark Invest sells Circle shares after recent rally

The selloff came as Circle’s stock, trading under the ticker CRCL, closed Tuesday at $154. The company’s shares have staged an explosive rally since debuting at $31 on June 5, 2025. Within just over two weeks, CRCL surged by nearly 387%, reaching a high of $165.60. 

Ark’s move to reduce exposure came after the US Senate passed the bipartisan GENIUS Act, a comprehensive framework regulating stablecoin issuers on June 17. The legislation is seen as a positive development for companies like Circle, whose operations were limited due to the previously “unfriendly” regulatory environment.

Late Tuesday, Circle CEO Jeremy Allaire praised the bill in a post on X, calling it a “genius” piece of legislation. 

It’s truly GENIUS https://t.co/0fClY524Ii

— Jeremy Allaire – jda.eth / jdallaire.sol (@jerallaire) June 17, 2025

Ark Invest reduced its Circle stake, but it has simultaneously increased its holdings in semiconductor stocks, looking to benefit from the artificial intelligence boom. The firm reportedly acquired additional shares of Advanced Micro Devices (AMD) and equities in Taiwan Semiconductor Manufacturing Company (TSMC).

In addition, Ark also cut down on its Meta Platforms shares and expanded holdings in Nvidia and food delivery firm DoorDash. 

ARKK’s rebound shadowed by short-seller numbers

Ark’s flagship ARK Innovation ETF has rebounded significantly since April, gaining more than 50%, but it hasn’t convinced everyone. Short interest in ARKK hit a record 37% of the ETF’s free float, according to data from analytics firm S3 Partners. 

In June alone, short sellers absorbed more than $300 million in mark-to-market losses as ARKK’s value climbed. Monday’s 4.4% rally alone inflicted another $93 million in losses on those betting against the fund.

“The funds have gone on great runs, but I wonder if investors who piled in during 2020 and 2021 are still feeling the effects of that rush and decline,” said Todd Sohn, senior ETF strategist at Strategas. “Perhaps they’ve moved on to other areas like crypto or levered single stock funds too.”

Analysts suggest that some of the short-selling pressure comes from funds hedging their long positions in large-cap tech stocks, a practice they insist on keeping even as those trades post short-term losses.

On Thursday, ARKK logged its largest single-day outflow since 2022. The fund has seen net redemptions for five straight weeks, totaling over $840 million this year. 

According to Bloomberg Intelligence analyst Athanasios Psarofagis, the exodus may be tied to the fund’s recent underperformance and competition from alternative ETFs. 

In a recent note, Psarofagis mentioned how new single-stock ETFs are the reason why retail investors are deciding to bypass Ark’s actively managed thematic funds.

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