Ark Invest boosts its stake in Circle as shares fall despite a strong Q3 earnings beat, while Circle’s CFO pushes back. | Credit: Getty Images.
Share
Key Takeaways
Cathie Wood’s Ark Invest purchased more than 353,000 Circle shares.
Circle reported a 202% jump in net income and a 66% rise in revenue, but shares slid.
Circle CFO Jeremy Fox-Geen said fears about declining reserve income are overstated.
Cathie Wood’s Ark Invest significantly increased its exposure to stablecoin issuer Circle on Wednesday, adding more than 350,000 shares even as the stablecoin issuer’s stock declined following its third-quarter earnings release.
Try Our Recommended Crypto Exchanges
Sponsored
Disclosure
We sometimes use affiliate links in our content, when clicking on those we might receive a commission at no extra cost to you. By using this website you agree to our terms and conditions and privacy policy.
Ark Invest purchased 353,328 shares of Circle, expanding its position in the stablecoin giant as part of a broader strategy to rotate capital into high-growth, disruptive technology plays.
The investment firm has been actively rebalancing its portfolios in recent weeks, trimming some long-held positions while, in classic Cathie Wood fashion, increasing exposure to more innovative companies.
Circle, which went public earlier this year, has drawn sustained institutional interest due to its central role in the rapidly growing stablecoin market.
Investor activity has picked up around Circle in recent months, driven by the boom in institutional stablecoin adoption and the firm’s barrage of partnerships.
Circle Posts Strong Q3 Earnings
Circle on Wednesday reported a 202% rise in net income to $214 million for the quarter ended Sept. 30, supported by surging demand for its U.S. dollar-pegged stablecoin, USDC.
Total revenue climbed 66% year-on-year to $740 million, boosted by rising reserve income and transaction fees.
The company processed $9.6 trillion in on-chain volume during the quarter, while USDC circulation jumped 108% to $73.7 billion, lifting Circle’s share of the global stablecoin market to 29%.
Jeremy Allaire, Circle CEO and Founder, said the firm had made “huge progress” delivering platforms to leading startups and financial firms.
Jeremy Allaire celebrated the positive Q3 results. | Source: X
Operating expenses also rose 70% to $211 million, reflecting higher headcount and stock-based compensation.
However, adjusted operating expenses increased by a more modest 35%.
“Circle continued to see accelerating adoption of USDC and our platform in the third quarter as we build the new Economic OS for the internet,” Allaire said in a company statement.
He cited growth in commercial partnerships and expanding cross-industry collaboration as key drivers of the company’s momentum.
Circle Shares Plummet
Despite the positive earnings, shares in the company fell as much as 10% on Wednesday, following concerns that most of the firm’s income came from interest paid on the assets backing USDC.
The worry is that dependency on interest from things like short-term Treasury bills could come under pressure as markets deal with a series of Federal Reserve rate cuts next year.
Circle shares plummeted after its Q3 earnings | Yahoo Finance
On Wednesday, Circle CFO Jeremy Fox-Geen pushed back against those concerns, arguing that the company is well-positioned to grow even in a lower-rate environment.
“We’re already in a rate-cutting cycle, and through that cycle we are delivering sustained growth,” Fox-Geen told Yahoo Finance.
Fox-Geen said that in many ways “we think falling rates are good for our business in the near term.”
“Falling rates lead to greater economic activity, more risk-taking, and increased investment,” he added.
Wood Expands Bet on Ethereum
Separately, Ark Invest recently increased its exposure to Ethereum-focused companies, buying 240,507 shares of Bitmine Immersion, despite many ETH companies operating in the red.
The move came shortly after Wood reduced her long-term Bitcoin price forecast, which she said reflected rising competition from stablecoins.
Bitmine, an ETH treasury firm led by Thomas “Tom” Lee, has positioned itself as an early leader in the Ethereum treasury model.
The company’s shares have surged nearly 700% year-to-date, climbing from around $5 to an October peak of $161 before settling in the mid-$50s.
Speaking on Wood’s podcast last month, Lee said Bitmine is now approximately the 470th-largest U.S. company by market capitalization.
He projected that Bitmine’s forthcoming staking solution could generate a 2.79% pre-tax yield, which he said would place it among the 800 most profitable companies in the country.
Kurt Robson is a London-based reporter at CCN, specialising in the fast-moving worlds of crypto and emerging technology. He began his career covering local news in Cornwall after graduating from Falmouth University with First Class Honours in Journalism. There, he cut his teeth on everything from council meetings to missing swans.
He quickly rose through the ranks to become a frontline journalist at several of the UK’s leading national newspapers. Over the years, he has interviewed musicians and celebrities, reported from courtrooms and crime scenes, and secured multiple front-page exclusives.
Following the upheaval of the COVID-19 pandemic, Kurt shifted his focus to technology journalism—just ahead of the AI boom. With a natural curiosity and a trained eye for emerging trends, he has found a new rhythm in reporting on innovation.
At CCN, Kurt's work focuses on the cutting edge of crypto, blockchain, AI, and the evolving digital world. Drawing on his background in people-first reporting and his deep interest in disruptive tech, Kurt delivers stories that are insightful, entertaining, and human-centric.
