Author: Dayu
Circle is the stock I follow most closely, and I've always believed it takes a cross-disciplinary player to truly understand this company. I've written a lot about it, and the investor who impresses me the most is Cathie Wood. Her operations on this target are textbook-level: from "hitting the open", to "selling high", to "buying back low", turning several hundred million dollars in profit back and forth.
Interestingly, she is not a swing trader; she is the type who looks at the long-term narrative and holds ultra-long-term through volatility. But her operations on this target make me think she simply grasped the short-term fluctuations very clearly—so clearly that even a long-term holder had to make a simple move.
With QNT about to go public, it's a good time to review Cathie Wood's operations on Circle, which is very valuable.
I. Hitting the Open: Why a New Stock Could Double Before It Even Opens
Circle's IPO involved a public offering of 34 million shares, priced at $31, raising about $1.1 billion. The underwriting syndicate (led by JPMorgan Chase, Citigroup, and Goldman Sachs) initially gave a range of $24 to $26, later raised it to $27 to $28, and finally set it at $31—the price being adjusted upward all the way was itself a signal of strong demand.
According to Bloomberg, this offering was oversubscribed by about 25 times; BlackRock also planned to take about 10% of the offering.
What truly decided the opening jump was the floating share supply.
At the time of its listing, Circle's total outstanding shares were about 223 million, but the shares actually put on the market for trading were only the 34 million from the public offering, about 15% of the total shares. The remaining roughly 85% of the shares, held by founders, early investors, and employees, were locked up and could not be sold in the short term.
Supply was capped at that small number of 34 million shares, while demand was piled up from 25 times oversubscription. When these two things collide, the price can only jump up to find balance. Thus, Circle opened directly at $69 (up 123% from the offer price), touched an intraday high of $103.75 (up 235%), and closed at $83.23 (up 168%).
This 168% first-day gain was the highest among billion-dollar-plus US IPOs in over thirty years.
This is the physical structure of "hitting the open": hot sector, small float, high multiple oversubscription. With these three combined, the opening is bound to gap up violently. It has little direct relation to whether the company is worth that price; it's purely that in the short term, "money wanting to buy" far exceeds "shares available to sell."
But lock-up periods don't last forever. Once that locked-up 85% is released, the extreme supply-demand imbalance at the opening will be gradually corrected. Circle's subsequent sharp drop confirms this.
II. Cathie Wood's Three Steps: Subscription, Selling, Buying Back
Cathie Wood's bullishness on Circle wasn't a judgment she formed on the day of listing. ARK has long bet on crypto assets and digital financial infrastructure, and she has publicly expressed her optimism about stablecoins many times. So for this one, she started moving even before the listing.
1. Pre-IPO: Getting Core Chips at the Offer Price
In Circle's IPO filing documents, ARK expressed its subscription intent, planning to buy up to $150 million worth of stock in this offering. Ultimately, it obtained about 4.49 million shares, distributed among three actively managed funds: ARKK, ARKW, and ARKF. At the $31 offer price, the cost was about $139 million, basically hitting its self-set subscription limit.
To bet on Circle, ARK sold portions of its other crypto-related holdings on the listing day: about $39 million of Coinbase (COIN), about $18.5 million of Robinhood (HOOD), and about $10.4 million of Block (XYZ). It did not increase its overall crypto exposure but shifted its allocation from other crypto targets to Circle.
With the first-day closing price at $83.23, ARK's 4.49 million shares were worth about $373 million, so the media widely reported "ARK buys $373 million of Circle." But $373 million was the market value of this position at the close, not the cash cost she paid; her actual cash outlay was the $139 million at the offer price. The pre-IPO shares had already more than doubled on paper before ordinary investors could even touch them. This portion of profit is the exclusive segment of the "hitting the open" reserved for those allocated shares at the offer price.
The first price ordinary investors saw in the secondary market was $69, while ARK's cost was close to $31.
2. Selling Amid Policy Boost
Circle's stock rose all the way after listing. What truly sent it soaring was policy.
On June 17, 2025, the US Senate passed the "GENIUS Act" (Stablecoin Bill) with a 68-30 vote, establishing a federal regulatory framework for dollar-denominated stablecoins for the first time. When the news came out, on June 18, Circle rose 33.8% in a single day, closing at $199.59; it continued to surge on the 20th; on the 23rd, it hit an intraday high of $298.99, which remains its all-time high to date, corresponding to a market cap of about $66 billion. Keep in mind, USDC's total circulating supply was about $61.7 billion at that time, meaning the equity of Circle, the company, was once worth more than all the stablecoins it issued combined.
It was during this wave of policy-driven sentiment that Cathie Wood began systematically reducing her position.
The first sell was on June 16, about 340,000 shares, at the day's closing price of $151.06; then one sale each on the 17th, 20th, and 23rd, of about 300,000, 610,000, and 420,000 shares respectively. In total, she sold about 1.7 million shares in four transactions, cashing out about $352 million, with an average price based on the closing prices of those days around $210. The cost basis of these shares was close to the $31 offer price, making the spread quite substantial.
Why did she choose to sell at this point? There are two layers of reasons.
One layer is discipline. ARK has a mechanical rule: if a single stock's weight in a fund approaches or exceeds 10%, it triggers rebalancing. Circle's surge pushed its weight up passively, and the rule itself forced her to reduce.
The other layer is supply. As mentioned earlier, that locked-up 85% would eventually be unlocked. In fact, Circle had an early unlock clause: if the stock price remained above 15% of the offer price for five consecutive trading days, it triggered early unlocking. JPMorgan released 11.5 million shares as early as August 13; on August 15, Circle issued an additional 10 million shares, priced at $130, of which 8 million came from secondary sales by existing shareholders.
While policy was pushing the price to the sky, the floodgates of supply were being opened one by one. Smart money was well aware of this. Cathie Wood did not sell at the absolute top. Her first two sells were around $150, and her last sell was only at $263, while the stock had touched an intraday high of $299. Looking at any single transaction, she didn't sell at the peak. But she wasn't gambling on the top; she was cashing out piece by piece at different points on the way up, which is precisely a repeatable approach—her later buybacks followed a similar reflexive logic.
3. Buying Back During the Deep Decline
After peaking on June 23, Circle began a months-long decline.
The downward forces were cumulative:
- The $66 billion market cap valuation had long detached from fundamentals;
- Unlocked supply was gradually pouring out;
- Plus, the market began pricing in Federal Reserve rate cuts, and Circle's revenue is highly dependent on interest income from reserves; rate cuts directly hit its earnings expectations.
On the way up, everything was positive; on the way down, everything turned negative.
On November 12, Circle released its Q3 earnings report: net profit of $214 million, triple the same period last year, earnings per share of $0.64, far exceeding market expectations of $0.20. The numbers were beautiful. But the stock actually fell 12% that day, closing at $86.30. Three reasons stacked together:
- The main lock-up period was set to expire in just two days (November 14), meaning another batch of insiders could sell;
- The company raised its expense guidance;
- And concerns about interest income due to potential rate cuts.
Good earnings became "good news is out."
It was on this day that Cathie Wood stepped back in. On November 12, she bought about 350,000 shares for about $30.4 million; she bought again the next day. Over the two days, she bought a total of about 540,000 shares for about $46 million, with an average buy price between $82 and $86—this was her first buyback of Circle since the June reduction.
She continued buying along the decline. In March 2026, Circle fell back to around $100 in another drop, and she bought about $16.3 million more. Circle eventually dropped to a low of $49.90, an 83% drawdown from its peak.
By the end of Q1 2026, according to 13F disclosures, ARK's holdings of Circle had returned to about 4.5 million shares, roughly equivalent to the size on the first day of listing—the position she sold in the $200s was bought back in the $80 to $130 range. CRCL is now the sixth-largest holding in ARKK, with just the ARKK fund alone holding about $300 million.
Her buyback process was also imperfect. The earliest buys were in the $80s, while the stock would later probe down to $50—these early buys were underwater after purchase. But she continued averaging down along the downtrend, relying on the same unchanged judgment: being long-term bullish on Circle's business model.
III. What Can We Really Learn
After this review, beyond the advantage of "low cost," three points were executed beautifully:
First, having an independent judgment about Circle's endgame. Judgment comes before trading. She dared to take a heavy position near the offer price and dared to start buying back when it fell to the $80s because she believes stablecoins are the underlying infrastructure for the digital dollar, and USDC is a core player within that. Without this judgment, so-called "buying high and buying back low" is just "chasing rallies and selling on dips" under a different name.
Second, staging, not betting on a point. Selling piece by piece on the way up, buying piece by piece on the way down. She sold in four tranches in June at an average price around $210; then bought back in many batches during the decline, from the $80s all the way down to around $50, and continued adding at $100 and $130 after it rebounded. Any single transaction alone was not optimal, but together they form a clean "sell high, buy low" pattern. This approach doesn't require predicting tops and bottoms; it only demands execution according to discipline when extreme prices appear.
Third, having position limits. What forced her to reduce in June was largely that mechanical rule: "rebalance when a single stock's weight exceeds 10%." This rule locked in profits for her when Circle surged to $299 and gave her cash and position room to buy back after it fell.
Position discipline is what ordinary retail investors lack the most.
For most people, "hitting the open" is precisely the most dangerous move. The opening jump is a dividend prepared for those who got allocations before the IPO; by the time ordinary people can buy in the secondary market, the easiest part to catch is the highest segment pushed up by the supply-demand imbalance. Circle fell from $299 to $50, an 83% drawdown. Those who chased in above $200 are likely still deeply underwater today. Participating in the same Circle, Cathie Wood executed beautifully, relying on judgment about the endgame, cost at the offer price, independent thinking, and position discipline. Missing one element could have led to a completely opposite outcome.
