Ark Invest rebalances crypto exposure with Circle share purchase and ARKB sale

Traders Union
All News
Crypto
Ark Invest adjusts crypto exposure

Highlights

Ark Invest bought 65,615 Circle shares for $5.2 million and sold $15.9 million of its Bitcoin ETF amid rebalancing due to diversification rules.
Circle shares fell 7.1% to $79.84 on Monday and are down 1.2% year to date, now comprising a 4.3% weighting in ARKW.
Bitcoin trades near $79,625, down 8.7% from its October high, with $80,000 becoming the most traded options strike and puts constituting 91% of $32 million volume.

Portfolio shifts amid bitcoin weakness

As reported by The Block, Ark Invest bought 65,615 Circle shares worth about $5.2 million for its Next Generation Internet ETF, ARKW, on Monday, while selling $15.9 million of its own spot Bitcoin ETF from two of its funds. The transactions come as bitcoin extends its retreat from early October highs and Ark continues to rebalance holdings to keep diversification limits in place.

Ark's strategy caps any single holding at no more than 10% of a fund's portfolio, which means positions can be trimmed or increased as market prices move. As of Oct. 27, Circle Internet Group is the fifth-largest holding in ARKW with a 4.3% weighting, valued at roughly $67.8 million, according to Ark's latest disclosures. Tesla, Meta, Shopify and Amazon hold the other top five positions in the fund.

Circle shares fall 7.1% on Monday to close at $79.84 and are down 1.2% year to date. The stock is also down 1.1% in pre-market trading on Tuesday.

Market pressure shapes crypto allocations

The Ark Invest/21Shares ARKB Bitcoin ETF remains a top-10 allocation in both ARKW and the ARK Blockchain and Fintech Innovation ETF, ARKF, with weightings of 3.7% and 3.8%, respectively. Those positions are valued at about $58.2 million in ARKW and $29.1 million in ARKF.

Since its launch in January 2024, ARKB has generated around $1.1 billion in net inflows and has $2.5 billion in assets under management. Bitcoin is trading near $79,625 on Tuesday morning, staying below the $80,000 level amid renewed selling pressure before Wednesday's Federal Reserve interest rate decision. The cryptocurrency has now pulled back 8.7% from its October high of about $87,200.

Joel Kruger, market strategist at LMAX Group, says rising Middle East tensions, higher oil prices and uneven institutional demand are contributing to the latest weakness in crypto markets. Nick Forster, founder and CEO of Derive, says traders are increasingly positioning for further downside, with $80,000 becoming the most actively traded bitcoin options strike on the exchange; put options account for 91% of roughly $32 million traded at that level over the past week.

In our earlier article on the AI-linked tech selloff and rate fears, we explained how hotter-than-expected inflation data reignited expectations for additional Federal Reserve tightening and triggered sharp declines in Nasdaq-linked stocks. We also noted that investors were reassessing the cost of financing large-scale AI infrastructure, with higher yields and funding concerns weighing on sentiment across major tech names and related sectors.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.