Ark Invest buys $5.2M of Circle shares, sells $15.9M of its Bitcoin ETF as Bitcoin pulls back

Ark Invest adjusts crypto holdings amid market weakness

Ark Invest, led by Cathie Wood, purchased shares of Circle Internet Group while reducing its position in its own Bitcoin exchange-traded fund (ETF) — a type of investment fund that trades on stock exchanges — as the broader crypto market weakened.

The firm bought 65,615 Circle shares, worth $5.2 million, for its Next Generation Internet ETF (ARKW) on Monday. At the same time, it sold $15.9 million worth of its spot Bitcoin ETF, which holds actual Bitcoin, from two of its funds.

The moves came as Bitcoin continued to trade below $80,000 after falling from its highs earlier in October.

Key transaction details

• Ark bought 65,615 Circle shares valued at $5.2 million for the ARKW fund


• Ark sold $15.9 million worth of its ARK 21Shares Bitcoin ETF (ARKB) across two funds


• Circle shares fell 7.1% on Monday, closing at $79.84


• Circle stock is down 1.2% so far this year


• Circle shares were down 1.1% in pre-market trading on Tuesday

Ark's rebalancing strategy behind the moves

The transactions are part of Ark's regular portfolio rebalancing. The firm follows a rule that no single investment can make up more than 10% of any fund, to maintain diversification. This means Ark will likely continue adjusting its holdings if the value of certain positions rises or falls significantly relative to other investments in its funds.

As of October 27, Circle is the fifth-largest holding in the ARKW fund, with a weighting of 4.3% worth about $67.8 million. Tesla, Meta, Shopify, and Amazon are the top four holdings in that fund.

The ARKB Bitcoin ETF remains a top 10 holding in both the ARKW fund and the ARK Blockchain and Fintech Innovation ETF (ARKF). It makes up 3.7% of ARKW, valued at roughly $58.2 million, and 3.8% of ARKF, valued at about $29.1 million.

The ARKB spot Bitcoin ETF has drawn about $1.1 billion in net investor money since it launched in January 2024, and currently manages $2.5 billion in assets, according to The Block's ETF tracker.

Bitcoin pulls back below $80,000

Bitcoin was trading around $79,625 on Tuesday morning, remaining under the $80,000 mark. The largest cryptocurrency has dropped 8.7% since its October high of roughly $87,200.

Market analysts have pointed to several factors behind the recent weakness. Joel Kruger, market strategist at LMAX Group, cited rising Middle East tensions, higher oil prices, and uneven demand from large institutional investors as reasons for the decline. He also noted that light trading over the weekend and forced selling from leveraged positions added to selling pressure. Kruger told The Block the pullback was driven more by broader economic factors than by a change in the long-term outlook for digital assets.

Nick Forster, founder and CEO of crypto options platform Derive, told The Block that traders were increasingly preparing for further price drops. The $80,000 level has become the most actively traded Bitcoin options strike price on the exchange. Put options — which let investors bet on or protect against price declines — made up 91% of the roughly $32 million traded at that level over the past week.

Investors are awaiting a Federal Reserve interest rate decision scheduled for Wednesday.

Sources

• The Block