Author: Andjela Radmilac, cryptoslate
Compiled by: Luffy, Foresight News
ARK Invest, led by Cathie Wood, purchased a total of $77 million worth of shares in crypto-related public companies in June. According to ARK's daily trading disclosures, during Bitcoin's worst monthly performance in four years, the fund increased its positions by $44 million in Coinbase, $25.25 million in Circle, and $8.2 million in Bullish.
Wood and several institutions have adhered to the same investment logic for years: crypto public companies provide investors with a compliant channel to participate in the crypto industry's cyclical gains without directly holding Bitcoin. However, an analysis of market data by CryptoSlate as of July 2 reveals the significant hidden costs of this stock investment path.
The 30-day annualized realized volatility for nine U.S.-listed crypto companies ranges from 68% to 90%, nearly double Bitcoin's 37.6% volatility. Over a 90-day period, Circle's volatility is as high as 103.6%, while Bitcoin's is only 37.8%. The gap in price drawdowns is also significant: Circle has fallen 51.4% from its high, MSTR is down 48.6%, and Bullish is down 43.6%; meanwhile, Bitcoin has retreated 36.4% from its near $97,000 peak in January, with all declines smaller than those of the aforementioned stocks.
30-day annualized realized volatility of BTC, ETH, and nine U.S.-listed crypto company stocks from January 1, 2026, to July 2, 2026.
Judging by volatility alone, crypto stocks appear to be leveraged Bitcoin. However, correlation data reveals a completely different truth. Over the past 90 trading days, the correlation coefficients of Circle, Robinhood, and Bullish with Bitcoin are only 0.55–0.58 (the correlation range is 0 to 1, where 1 represents perfectly synchronized movements and 0 represents no correlation). This means Bitcoin price fluctuations can only explain about one-third of the volatility in crypto company stocks. The remaining volatility stems entirely from company-specific risks: quarterly earnings reports, industry competition, fundraising activities, share dilution, and more. Investors aiming to gain crypto industry exposure through stocks end up with only partial Bitcoin exposure while additionally bearing a full set of business risks unique to the stock market.
Only One Stock Truly Tracks Bitcoin
The table below shows the correlation of crypto company stocks with Bitcoin from the end of 2025 to the present. Beta represents the percentage change in a stock for every 1% move in Bitcoin.
MSTR is the only stock in the entire market that can be considered a Bitcoin alternative. With a beta of 1.59 and a correlation of 0.85, it is essentially an equity tool for holding Bitcoin with leverage. In the recent downturn, its year-to-date decline and drawdown from highs have far exceeded Bitcoin's.
Coinbase is a relatively balanced choice, with a year-to-date decline of -26.8%, slightly less than BTC's. Its beta coefficient is 1.26, and its correlation coefficient is 0.75, making it the second-strongest correlated with Bitcoin within the sector. However, its volatility is still nearly double that of Bitcoin, and its stock price is down 60.6% from its all-time high of $419.78 in July 2025. Losses for investors who bought at that peak are far greater than for those who entered at Bitcoin's historical high in October 2025.
Circle perfectly illustrates 'business risk in crypto clothing.' It has the lowest correlation with Bitcoin in the sector and the highest 90-day volatility. The trigger occurred on June 30: with the official launch of the Open USD stablecoin, backed by a consortium of over 140 companies including Coinbase, Stripe, Visa, Mastercard, and BlackRock, CRCL plummeted 17.5% in a single day. This sharp drop was almost entirely unrelated to Bitcoin's performance, purely a company-specific negative driven by competition for market share in the stablecoin sector.
Robinhood is a counterexample, similarly demonstrating that individual stock performance can be independent of crypto trends. The stock has only declined slightly by 0.3% year-to-date, with a maximum drawdown of just 8.5%. Crypto business is just a small part of its overall brokerage portfolio, which includes stocks, options, and derivatives. Its diversified business has cushioned the decline; conversely, during a crypto bull market, it is unlikely to provide investors with substantial gains from crypto price movements.
Mining company trends are the most anomalous. While Bitcoin fell 29.5% year-to-date, RIOT surged 74.5%, MARA rose 38.1%, and CleanSpark gained 24.7%. The core logic is that mining companies are transforming into AI high-performance computing service providers, signing hundreds of billions in computing power leasing contracts while continuously selling their Bitcoin holdings. Although their daily price movements still follow Bitcoin (beta coefficients are all greater than 1), their annual returns are entirely driven by AI hosting business, decoupled from coin prices.
Year-to-date price changes of BTC, ETH, and nine U.S.-listed cryptocurrency stocks.
Bitcoin's own volatility is not insignificant. Volmex's Bitcoin 30-day Volatility Index dropped to a low of 24.5 in late May, peaked at 68.7 in early February, and rebounded to 41.6 in early July. Even so, the volatility of most crypto stocks remains nearly double.
Strategy Case Study: Equity Structure Adds Extra Risk
Holding Bitcoin only requires bearing the risk of price fluctuations; buying shares in crypto public companies adds multiple variables: business operations, equity dilution, disappearing valuation premiums, fundraising pressure, changes in capital structure, and more.
Strategy recently exposed all these risks in a concentrated manner over the past month. At the end of June, its price-to-book ratio (mNAV) fell below 1 for the first time. This metric measures the company's total valuation relative to its net assets. A ratio below 1 means the market values the entire company less than the cash and Bitcoin it holds. According to the June 22 disclosure, Strategy held 847,363 Bitcoins. On the day mNAV fell below 1, these Bitcoins were worth approximately $50 billion.
An mNAV greater than 1 is the foundation of Strategy's entire growth flywheel. In the past, the company could issue common and preferred shares at a premium, raise funds, and continue to acquire Bitcoin, increasing Bitcoin holdings per share. Once mNAV falls below 1, this cycle can reverse and erode shareholder value—issuing shares to raise funds for buying Bitcoin is equivalent to selling existing Bitcoin assets at a discount.
CryptoSlate reported as early as January that Bitcoin-holding companies are divided into those trading at a valuation premium and those at a discount. By the end of June, Strategy's total market capitalization was $29.54 billion, less than half of its peak of over $71 billion in 2024, with all four classes of preferred shares at historical lows.
Strategy announced countermeasures. On June 29, it unveiled a stock buyback plan of up to $1.25 billion and authorized the sale of Bitcoin to supplement liquidity, covering preferred stock dividends and debt interest. In the preceding weeks, on June 1, the company conducted its first Bitcoin sale since 2022, selling only 32 Bitcoins. After the announcement, the stock surged 12.6% in a single day, ending an eight-day losing streak. The world's largest Bitcoin holder needing to sell its holdings in a bear market to secure cash flow is a constraint not encountered when directly holding Bitcoin and is a risk unique to stocks.
This is precisely the backdrop for ARK's contrarian accumulation. On June 25, amidst a collective slump in crypto stocks, Wood's funds bought $3.27 million worth of Robinhood shares in a single day, simultaneously increasing positions in Coinbase, Circle, and Bullish. Wood believes Bitcoin's long-term target price is in the millions of dollars and is currently investing heavily at a discount in crypto public companies that have seen deep corrections since their 2025 highs.
The data reveals the true nature of these companies.
- Strategy = Leveraged Bitcoin + Equity Dilution Risk;
- Circle = Stablecoin sector payment company, deeply entangled in market share battles;
- Robinhood = Comprehensive broker, crypto is just a side business.
Wood's basket purchase of these company stocks is essentially a bet on a combination of different business models, with vastly differing levels of crypto exposure.
Each individual stock has its own investment logic: Coinbase has outperformed Bitcoin year-to-date, Robinhood has maintained its price since the beginning of the year, and the mining sector has led in overall returns. But the core question remains: are crypto stocks really less risky than holding coins directly?
Data from the nine public companies shows that stocks either amplify Bitcoin's volatility or add company-specific operational risks unrelated to coin prices.
The truly strong-performing cryptocurrency stocks this year rely on independent growth businesses like AI computing power, brokerage traffic, and payment products, with Bitcoin being only a secondary influencing factor.
