Ark buys $5.2M of Circle as Mizuho flags AI-agent risk to USDC

Cathie Wood's Ark Invest bought the dip in Circle on Monday and trimmed its bitcoin ETF holdings, just as a Mizuho note warned that AI assistants could pull money away from USDC. Ark added 65,615 Circle shares, worth about $5.2 million, to its Next Generation Internet ETF (ARKW) and sold about $15.9 million of the ARK 21Shares Bitcoin ETF (ARKB) from two funds, The Block reports.

Rebalancing, not a call on bitcoin

Ark caps any single holding at about 10% of a fund, so it routinely trims winners and adds to losers. After the trades:

• Circle is ARKW's fifth-largest position at 4.3%, worth roughly $67.8 million.
• ARKB remains a top-10 holding in ARKW (3.7%, about $58.2 million) and in the ARK Fintech Innovation ETF, ARKF (3.8%, about $29.1 million).
• ARKB has taken in about $1.1 billion of net inflows since its January 2024 launch and manages about $2.5 billion, according to The Block's data.

Circle stock fell 7.1% on Monday to close at $79.84, down 1.2% for the year. US spot bitcoin ETFs as a group took in $110 million the same day, as we reported this morning.

Mizuho: AI agents may move money out of USDC

In a Monday report, Mizuho cut its Circle price target to $43 from $45 and kept an Underperform rating, according to The Block. Its argument is new: AI personal assistants that manage users' cash may recommend higher-yielding, insured accounts instead of holding USDC, which pays no interest on Circle's own platform.

• Wider use of AI agents could shrink USDC's market value by $4 billion to $9 billion, Mizuho estimates, a 10–20% hit to Circle's reserve revenue in the medium term.
• In a faster scenario, about $7 billion would move to bank-style products and $2 billion to higher-yielding stablecoins, cutting reserve revenue by 18%.
• About 17% of USDC sat on Circle's platform in Q2, 30% on Coinbase and 53% elsewhere. How that income is split is explained in our story on Circle's partner payouts.

Market backdrop

Bitcoin traded near $79,600 on Tuesday morning, about 8.7% below its early-October high of roughly $87,200, ahead of Wednesday's Federal Reserve decision. LMAX strategist Joel Kruger pointed to Middle East tensions, higher oil prices and uneven institutional demand. On options platform Derive, $80,000 was the most traded bitcoin strike over the past week, and 91% of the roughly $32 million traded there was in puts, its CEO Nick Forster told The Block. Prices in the snapshot above are from our latest build.

Our take

Ark's trades are mechanical rebalancing, not a forecast. The Mizuho note matters more for anyone choosing between USDT and USDC: a stablecoin's issuer earns the yield on reserves, while most holders get none unless a platform shares it. Owning a bitcoin ETF instead of coins carries its own trade-offs.