Should You Short Circle (CRCL) After ARK's $96M Profit Take? A Crypto Analyst's Cold Hard Look
The $400B Paradox: Circle’s Valuation Versus Reality
When your neighborhood stablecoin issuer suddenly becomes more valuable than half of Wall Street’s fintech darlings, you know we’re in uncharted territory. Circle (CRCL) now commands a $40 billion market cap - for context, that’s 66% of USDC’s total circulating supply. Let that sink in.
Institutional Whales Making Moves
ARK Invest’s playbook here was textbook:
- June 5: Bought \(373M worth at IPO (\)83/share)
- June 16-17: Dumped ~640K shares near $160 (500% ROI)
Their $96M profit take represents just 25% of position - classic scaling-out strategy. Meanwhile, BlackRock’s BUIDL fund lurks in the background with its treasury-grade competition.
Why Shorting Could Be Financial Harakiri
- Lockup Physics: 180-day insider hold means supply shock continues
- Narrative Premium: CRCL isn’t priced on revenue - it’s ‘the only compliant stablecoin play’ meme
- Fee Bleed: Annualized short interest costs exceed 5% (see Deribit data)
As one trader lamented: “My traditional valuation models got steamrolled by crypto market logic.”
The Hayes Doctrine Applies Here
Former BitMEX CEO Arthur Hayes’ warning rings true:
“You can choose not to buy, but never short a politically-connected compliance trophy during election year.”
The play? Watch Coinbase custody flows for USDC mint/burn signals. When VISA starts settling in USDC (rumored Q3), this could go full “digital dollar proxy.” Until then, keep your powder dry and respect the irrationality.
