Ark sells $15.9M of ARKB, buys $5.2M of Circle

Ark Invest sold $15.9 million of its own spot BTC$79,911.00▲0.51% Bitcoin exchange-traded fund, ARK 21Shares Bitcoin ETF (ARKB), on Oct. 27 while buying 65,615 shares of Circle Internet Group for $5.2 million. The transactions were reported by The Block, which identified ARKB as being offloaded from two Ark investment funds.

The trade changes the mix of exposure held by Ark’s funds. The $5.2 million Circle purchase equals 32.7% of the $15.9 million ARKB sale, calculated as $5.2 million divided by $15.9 million. That does not mean 32.7% of the sold Bitcoin exposure was directly replaced by Circle, since the transactions occurred in different funds and the fact sheet does not disclose the exact allocation of the ARKB sale.

The Circle shares were bought for Ark’s Next Generation Internet ETF, ARKW. Circle Internet Group, Inc. (CRCL) was already ARKW’s fifth-largest holding, with a 4.3% weighting worth about $67.8 million. For ARKW holders, the immediate portfolio consequence is a larger disclosed position in Circle; for investors in the two funds that sold ARKB, the consequence is lower indirect Bitcoin exposure.

Ark’s ARKB remains a top-10 allocation in both ARKW and the ARK Blockchain and Fintech Innovation ETF, ARKF. Before this transaction, ARKB represented 3.7% of ARKW, valued at approximately $58.2 million, and 3.8% of ARKF, valued at approximately $29.1 million. The fact sheet does not specify how much of the $15.9 million sale came from each fund, so the post-trade weightings cannot be calculated from the disclosed figures.

Ark’s stated explanation leaves room for the sale to be mechanical. “Ark’s investment strategy involves letting no individual holding take up more than 10% of a fund’s portfolio,” the firm said, adding that it may continue rebalancing when holdings rise or fall relative to other positions. That policy matters here because the disclosed allocation data show ARKB and Circle as material positions, while neither is near the 10% ceiling in the figures provided.

Still, the paired transactions point to a different emphasis in the crypto sleeve. The desk’s read is that Ark is reassessing some Bitcoin exposure while adding to an equity position tied to stablecoin infrastructure and regulated financial entities. The available documents do not establish whether market conditions, portfolio limits, or a change in long-term thesis drove the decision.

The Circle purchase also follows a prior Ark allocation. On July 31, Ark added 109,129 Circle shares across three actively managed ETFs in a transaction valued at about $6.83 million, according to The Crypto Times.

Circle also received approval for an OCC national trust bank on July 10, while NYDFS granted the limited purpose trust charter to Circle Internet Trust Company LLC, doing business as Circle New York Trust, on July 31. Those regulatory milestones provide the documented backdrop for the regulated-entity side of Ark’s exposure, although the fact sheet does not connect the Oct. 27 purchase explicitly to either approval.

Circle’s stablecoin business is the other part of the trade’s significance. USDC circulation grew 19% to $73.2 billion and recorded $1.2 trillion in June trading volumes, while Circle’s quarterly transaction revenue rose from $23.8 million to $47.2 million. Circle CEO Jeremy Allaire described the regulatory framework as a “longstanding objective” for the firm, saying it places USDC “within a strong, respected framework as digital dollars become central to the global financial system.”

The equity purchase came as CRCL shares were under pressure. Circle fell 7.1% on Monday to close at $79.84 and was down 1.2% year-to-date as of Oct. 27. USDC was trading at $0.999297, down 0.1% over 24 hours, according to CoinGecko. The share-price move is context for Ark’s entry, not evidence of why the firm bought.

The Bitcoin side of the rebalance landed during a weaker tape. [Ticker BTC] Bitcoin traded around $79,625 on Tuesday morning, down 8.7% from its October high near $87,200. Ark’s ARKB has generated around $1.1 billion in net inflows since launching in January 2024 and held $2.5 billion in assets under management, so the $15.9 million sale represents about 0.64% of that AUM, calculated as $15.9 million divided by $2.5 billion.

Options positioning added pressure to the market backdrop. Derive founder and CEO Nick Forster said traders were increasingly positioning for further downside, with $80,000 the most actively traded Bitcoin options strike. Put options made up 91% of roughly $32 million traded at that level over the prior week, or about $29.1 million using the stated percentage.

The direct effect is limited but clear: ARKW receives $5.2 million of additional Circle stock, while two Ark funds sell $15.9 million of ARKB. Ark’s ARKB still remains a top-10 allocation in ARKW and ARKF, and the firm’s stated diversification rule means further changes can occur if the relative values of those holdings move materially. The unresolved question is whether this is mainly routine rebalancing or the first visible step toward a larger preference for stablecoin infrastructure over direct Bitcoin exposure.