Ark Invest bought $5.2 million of Circle shares and sold $15.9 million of its own spot Bitcoin ETF as bitcoin stayed below $80,000. The firm's rebalancing coincides with selling pressure ahead of Wednesday's Federal Reserve rate decision.
Cathie Wood-led Ark Invest bought 65,615 Circle shares, worth $5.2 million, for its Next Generation Internet exchange-traded fund (ARKW) on Monday. It also offloaded $15.9 million worth of its own spot Bitcoin ETF from two of its investment funds.
Ark's strategy lets no individual holding take up more than 10% of a fund's portfolio. The aim is to maintain diversification within its funds, so Ark is likely to keep rebalancing if certain shares rise or fall significantly relative to its other holdings.
Circle ranks fifth in ARKW
Circle is currently the fifth-largest holding in ARKW, with a weighting of 4.3%, worth around $67.8 million. Circle shares fell 7.1% on Monday, closing at $79.84.
Meanwhile, Ark's ARKB remains a top 10 allocation in the Next Generation Internet fund and the ARK Blockchain and Fintech Innovation ETF (ARKF). The weightings stand at 3.7% and 3.8%, valued at approximately $58.2 million and $29.1 million, respectively.
Bitcoin slips below $80,000
Bitcoin was trading around $79,625 on Tuesday morning, below the $80,000 mark amid renewed selling pressure ahead of Wednesday's Federal Reserve interest rate decision. The largest cryptocurrency has pulled back 8.7% since its October high of around $87,200.
Joel Kruger, market strategist at LMAX Group, pointed to growing tensions in the Middle East, higher oil prices, and uneven institutional demand as reasons for the weakness. He told The Block that thin weekend trading and leveraged liquidations added to the selling pressure, though he argued macroeconomic factors, more than a fundamental change in the outlook for digital assets, drove the decline.
Nick Forster, founder and CEO of crypto options platform Derive, told The Block that traders were increasingly positioning for further downside. Put options accounted for 91% of the roughly $32 million traded at the $80,000 strike over the past week.
Source: The Block
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