Circle Internet (CRCL) Stock Declines 20% as Cathie Wood’s Ark Buys the Dip

TLDR

• Circle’s stock declined 20% on Tuesday amid a wave of negative developments
• Proposed language in the U.S. STABLE Act may prohibit yield payouts on stablecoins such as USDC
• Onchain researcher ZachXBT disclosed that Circle froze USDC wallets linked to a U.S. civil case
• Competitor Tether announced its first full financial audit with a Big Four firm, undermining Circle’s “compliant” advantage
• Ark Invest purchased 161,513 CRCL shares valued at $16.34 million across its ARKK, ARKW, and ARKF funds

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(SeaPRwire) –   Circle Internet Group (CRCL) endured a tough Tuesday. The stock plummeted 20% in a single session, battered by three concurrent pieces of adverse news. By market close, CRCL stood at $101.17.

Circle Internet Group, CRCL

Analysts at Mizuho cited draft provisions from the U.S. STABLE Act as the primary cause of the drop. The draft, circulated among industry insiders earlier in the week, indicates a potential ban on yield payments for holding stablecoins. For Circle—where USDC is a cornerstone of its business model—such a regulatory shift would have tangible repercussions.

Simultaneously, onchain investigator ZachXBT reported that Circle had frozen the USDC balances of 16 hot wallets associated with various businesses. These wallets were connected to an ongoing U.S. civil case.

The report highlighted the centralization risk tied to USDC. Unlike decentralized alternatives, Circle can—and does—freeze funds at the behest of U.S. authorities.

Tether Moves on Audit

Then came news from Tether. Circle’s largest rival revealed it is proceeding with its first full financial audit, enlisting a Big Four accounting firm to conduct it.

This is significant because Circle has long marketed itself as the transparent, compliant alternative to Tether. If Tether narrows this gap, one of CRCL’s key selling points diminishes substantially.

Three separate headwinds in one day. The impact compounded rapidly.

Despite the selloff, CRCL rebounded 1.5% in after-hours trading. Looking at the broader trend, the stock remains up 65% over the past month, though it is still down 23% over the past six months.

Ark Buys the Dip

While most investors were exiting positions, Ark Invest was buying. Cathie Wood’s firm acquired 161,513 CRCL shares across its ARKK, ARKW, and ARKF ETFs on Tuesday, totaling $16.34 million based on the day’s closing price.

The move appears to be a deliberate dip-buying strategy. Ark has actively managed its crypto-related holdings throughout early 2026, including stakes in Coinbase and Robinhood.

Circle currently ranks as the third-largest holding in Ark’s ARKK ETF, with a 5.48% weighting valued at $334.5 million. Ark’s strategy caps individual holdings at roughly 10% of a fund’s portfolio, driving ongoing rebalancing as prices fluctuate.

On the sell side, Ark offloaded 41,064 Bullish (BLSH) shares worth $1.53 million. Bullish stock fell 5.51% on the day.

CRCL remains up 65% over the past month despite Tuesday’s sharp decline.