Cathie Wood’s ARK ETF buys $70 million in SPAC tied to stablecoin operator Circle

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Cathie Wood’s ARK Invest has bought a wad of shares in the special purpose acquisition company, or SPAC, which is merging with Circle, one of the largest stablecoins in crypto.

Circle is considering going public, after the payment and cash infrastructure provider to internet businesses announced plans this summer to merge with SPAC Concord Acquisition Corp. CND,
-0.49%

Wood’s ARK Fintech Innovation ETF ARKF,
-5.23%
purchased 6.93 million shares of SPAC for approximately $70.6 million, representing a new position for the fund.

The merger of Circle, co-founded and led by CEO Jeremy Allaire, and Concord was expected to take place in the fourth quarter of 2021, with the combined entity to be listed on the NYSE under the symbol “CRCL”.

Circle is the main operator of the stablecoin, USD Coin, which is a digital asset pegged to the dollar and intended to hold its value, serving as a “stable” asset in the world of virtual coins such as bitcoin BTCUSD,
+0.02%
and Ether ETHUSD,
+0.45%
on the Ethereum network which are notoriously volatile.

Circle USDCUSD Coin USD,
-0.01%
is the sixth largest digital asset by market value among crypto and the second largest stablecoin, behind Tether USDTUSD,
.
The USD accounts for about a third of the stablecoin supply.

However, stablecoins have caught the attention of US financial regulators who say the assets can pose a risk to the financial system if not properly regulated.

Last month, the Financial Stability Oversight Council, or FSOC, said in a report that “if stablecoins are marketed with the claim that they will maintain a stable value, they could be subject to redemptions and widespread asset liquidations if investors doubt the credibility of this”. Claim.”

In October, Circle said it received a “subpoena” over the summer from the Securities and Exchange Commission requesting “documents and information regarding certain of our holdings, client programs and operations,” in a case. “We are fully cooperating with their investigation,” Circle said.

Shares of Concord Acquisition, which is backed by former Barclays CEO Bob Diamond, closed down 0.5% on Thursday and are flat for the week so far, but down 3.2% so far. 2022. In comparison, the ARK Fintech ETF ended Thursday at 5.2% and was looking at a weekly decline of 3% and a drop of more than 13% in the first two weeks of the year, until now, according to FactSet data.

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