Cathie Wood Defends Circle, USDC Issuer, After 42% Stock Drop

Wood Defends Circle After 42% Drop

ARK Invest founder Cathie Wood defended her continued buying of Circle, the company behind the USDC stablecoin, after the stock fell 42% over the past year. In a Sunday post on X, Wood argued that Wall Street analysts who built their track records analyzing Visa and Mastercard cannot fathom Circle, which she describes as a payments disrupter. The chart she replied to, published by analyst Alex Obchakevich, tracks the three payment firms over one year: Visa up about 5%, Mastercard up about 1%, and Circle down 42%. Wood then reached for history, noting that Mastercard has appreciated roughly 150 times and Visa roughly 33 times since their public listings, rewarding analysts who recommended buying the dip in those stocks. Her arithmetic checks out against the companies' own IPO disclosures: Mastercard priced its 2006 offering at $39 per share and later split 10-for-1, putting the adjusted entry near $3.90, which is about 149 times Friday's close of $580.63. Visa sold shares at $44 in March 2008 and split four-for-one in 2015, an adjusted $11, or about 34 times Friday's close of $371.04. Wood's Circle figure does not survive the same test. Circle priced its June 2025 IPO at $31, and Friday's close of $87.98 is a gain of roughly 184%, not the 84% she cited. Circle issues USDC, a digital dollar backed by cash and short-term U.S. government debt, a reserve model that separates it from algorithmic stablecoins. Wood framed the setup as one where technology, not analyst skill, is rewriting payments, with the broader altcoin market likely to reward the issuer that connects traditional finance to on-chain settlement. She has said the one-year slide shows the short-term inefficiency of public equity markets, a view that places her squarely against a sell-side community that grew up valuing card networks.

ARK's $329M Circle Stake Faces Analyst Split

ARK's flagship fund has put real money behind that view. By Friday's close, the fund held 3,931,968 Circle shares, a position worth $329 million and equal to 5.14% of the portfolio. The stake, disclosed in ARK's latest update, surpasses its Coinbase holding, making Circle the fund's largest crypto-related equity bet. Wood is not hedging: she has repeatedly added through the drawdown, and her fund's position is now the clearest expression of her digital dollar thesis. The broader analyst community remains split, and the dispersion of views is unusually wide. Of 21 analysts covering Circle, 11 rate it a strong buy, two rate it a buy, five say hold and three say sell. Price targets range from a bearish $37 to a bullish $173, a 4.7-fold gap on the same company at the same time, with the average sitting at $98.61. The sell side is not ignoring the stock; it simply lacks a shared framework. On Visa or Mastercard, analysts can anchor valuation to transaction volumes, take rates and buyback programs. On Circle, the earnings stream depends on the direction of interest rates and the speed at which businesses adopt digital dollars. Much of Circle's revenue comes from interest earned on reserves, a stream that shrinks when rates fall; the rest rides on how quickly USDC is used in payments. The financial statements show the tension: revenue grew about 37%, and the company became profitable after a Q2 earnings surprise in early August, yet its market value still fell 30%. Competition adds another layer. Circle is building a four-layer financial stack on its own Arc blockchain, while Open USD, a consortium of more than 140 firms, is pursuing the same stablecoin rails. Whether USDC keeps its position as a dominant digital dollar or cedes ground to a rival ecosystem will help determine whether the stock's valuation is justified by adoption or by a stable fee model.

Rate Cycle Is Next Circle Test

The through-line in both the share accumulation and the analyst split is that Circle, the USDC issuer, is being valued as two different companies: a regulated payments firm and an infrastructure bet on the crypto economy. In her Sunday X post, Wood tied those strands together, arguing that technology will favor the disrupter. What remains unresolved is the rate cycle. If reserve income keeps shrinking, the bullish thesis fades; if adoption accelerates, the $37 bear case becomes harder to defend. Unlike a token distributed by an airdrop, USDC's value accrues through balance-sheet mechanics, leaving the next earnings report as the nearest catalyst. If adoption accelerates, Circle could climb toward a new all-time high; if rate pressure persists, the $37 target comes back into play.