By Nate Wolf
The Circle Internet Group selloff may have been steep, but it didn't last for long.
Circle stock rose 4.6% to $105.81 in premarket trading Wednesday, clawing back some of the heavy losses it took the prior day. Cathie Wood's ARK Invest scooped up shares on the dip, and the stablecoin issuer also got endorsements from some of its fans on Wall Street.
Shares tumbled 20% Tuesday after investors learned that a provision intended for the Clarity Act -- the much-awaited crypto market structure bill -- would prohibit platforms from offering yield on customers' stablecoin holdings in any way that resembles a bank deposit. Circle issues USDC, the world's second-largest stablecoin by circulation.
To make matters worse, stablecoin rival Tether announced it had hired a Big Four accounting firm to complete its first full independent audit, adding to chatter about the company's potential U.S. expansion. Tether's USDT is the world's largest stablecoin, though it is mostly associated with markets outside North America.
ARK Invest, the investment management firm run by Cathie Wood, appeared to use the Circle selloff as a buying opportunity. ARK snapped up more than 160,000 shares across three of its exchange-traded funds on Tuesday, per its daily trade log. At Circle's Tuesday closing price of $101.17, that haul was worth around $16.2 million.
Representatives from ARK didn't immediately respond to Barron's request for comment.
The pullback shouldn't "be read as evidence that the stablecoin thesis is broken," Clear Street analyst Owen Lau wrote in a research note Wednesday.
Legislators' move to outlaw yield on idle stablecoin holdings isn't new or surprising. That ban would eliminate one incentive for customers to adopt stablecoins, but the revised Clarity Act language may still leave the door open for activity-based rewards for using USDC, Lau pointed out.
As for the growing domestic competition from Tether, Circle still has a head start on the compliance front.
"USDC remains widely viewed as the most regulatory-compliant stablecoin globally," Lau wrote. "A leading competitor improving its audit standards does not materially change that dynamic."
Clear Street reiterated a Buy rating and a $152 price target on Circle stock. At least four other Wall Street firms joined in Tuesday, maintaining their equivalent of Buy ratings, according to FactSet.
The central question for Circle investors is "whether users and institutions still need a regulated, dollar-denominated, always-on settlement asset," Lau concluded. "On that question, the answer remains yes."
Write to Nate Wolf at nate.wolf@barrons.com
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March 25, 2026 08:11 ET (12:11 GMT)
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