ARK Makes a Big Move to Buy Crypto Concept Stocks: Lower Risk or Double Pressure?

Author: Andjela Radmilac; Translated by: Luffy, Foresight News

ARK Invest, led by Cathie Wood, purchased a total of $77 million worth of crypto public company stocks in June. According to ARK's daily trading disclosures, during Bitcoin's worst monthly performance in four years, the fund added $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 share in the cyclical gains of the crypto industry without directly holding Bitcoin. However, data analysis by CryptoSlate as of July 2 reveals the hidden costs of this stock investment path.

The annualized 30-day realized volatility range for nine US-listed crypto companies is 68%–90%, nearly double Bitcoin's 37.6% volatility. Extended to a 90-day horizon, Circle's volatility reaches 103.6%, while Bitcoin's is only 37.8%. Drawdown differences are also significant: Circle has dropped 51.4% from its high, MSTR 48.6%, and Bullish 43.6%; Bitcoin has fallen 36.4% from its near $97,000 high in January, with all declines less than those of the individual stocks.

30-day annualized realized volatility for BTC, ETH, and nine US-listed crypto company stocks from January 1 to July 2, 2026

Looking solely at volatility, crypto stocks seem like leveraged Bitcoin, but 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 (correlation ranges from 0 to 1, where 1 means perfectly synchronized and 0 means no correlation), indicating that Bitcoin price fluctuations can only explain about one-third of the volatility of crypto company stocks. The remaining volatility comes from company-specific risks: quarterly earnings, industry competition, financing activities, equity dilution from share issuances, etc. Investors hoping to gain exposure to the crypto industry through stocks only receive partial Bitcoin price exposure while also bearing a full set of operational risks unique to the stock market.

Only One Stock Truly Tracks Bitcoin

The table below shows the correlation between crypto company stocks and Bitcoin since the end of 2025. Beta represents the percentage change in each stock for every 1% move in Bitcoin.

Table: 90-day annualized realized volatility, correlation with BTC, beta, YTD % change, and drawdown from historical highs for nine US-listed crypto stocks

Across the entire market, only MSTR can be considered a Bitcoin substitute. With a beta of 1.59 and a correlation of 0.85, it is essentially a leveraged equity instrument holding Bitcoin. In the current downturn, its YTD decline and peak-to-trough drawdown far exceed those of Bitcoin.

Coinbase is a relatively balanced choice, with a YTD decline of -26.8% slightly less than BTC, a beta of 1.26, and a correlation coefficient of 0.75, making it the second most correlated with Bitcoin within the sector. However, its volatility remains nearly double that of Bitcoin, and its stock price has fallen 60.6% from its all-time high of $419.78 in July 2025, with losses for investors who bought at that high far greater than those who entered at Bitcoin's all-time high in October 2025.

Circle perfectly exemplifies "corporate risk under a crypto cloak." It has the lowest correlation with Bitcoin in the sector and the highest 90-day volatility. The trigger came on June 30: the Open USD stablecoin, backed by over 140 companies including Coinbase, Stripe, Visa, Mastercard, and BlackRock, was officially launched, causing CRCL to plummet 17.5% in a single day. This sharp drop was almost entirely unrelated to Bitcoin's price movement, purely a company-specific negative from competition in the stablecoin market share.

Robinhood is the opposite case, also confirming that individual stock business is independent of crypto market trends. The stock has only slightly declined 0.3% YTD, with a maximum drawdown of just 8.5%. Crypto business is just a small part of its broader stock, options, and derivatives brokerage; diversification has cushioned the downturn. Conversely, during a crypto bull market, it is difficult for it to provide investors with ample crypto price gains.

Mining stocks show the most unusual trend. Bitcoin is down 29.5% YTD, while RIOT is up 74.5%, MARA up 38.1%, and CleanSpark up 24.7%. The core logic is that mining companies are transitioning into AI high-performance computing service providers, signing hundreds of billions in computing power lease contracts and continuously reducing their Bitcoin inventory. Although daily price movements still correlate with Bitcoin (all with betas greater than 1), their annual returns are entirely driven by AI hosting businesses, decoupled from Bitcoin prices.

BTC, ETH, and nine US-listed crypto stocks YTD price change

Bitcoin's volatility itself is not insignificant. Volmex's Bitcoin 30-day volatility index hit a low of 24.5 in late May, peaked at 68.7 in early February, and rebounded to 41.6 in early July. Despite this, the volatility of most crypto stocks remains doubled.

Strategy Case Study: Equity Structure Brings Additional Risks

Holding Bitcoin only involves the risk of price fluctuations; buying shares in a crypto public company adds multiple variables such as business operations, equity dilution, valuation premium disappearance, financing pressure, and capital structure changes.

Strategy has exposed all these pitfalls in the past month. At the end of June, its market-to-net-asset-value (mNAV) ratio 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. As of June 22, Strategy held 847,363 Bitcoin, and on the day mNAV fell below 1, those Bitcoin were worth about $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 then buy more Bitcoin to increase per-share holdings. Once mNAV falls below 1, this cycle reverses and erodes shareholder value—issuing shares to raise capital to buy Bitcoin is equivalent to selling existing Bitcoin assets at a discount.

CryptoSlate reported as early as January that Bitcoin-holding companies can be categorized as having valuation premiums or discounts. At the end of June, Strategy's total market cap was $29.54 billion, less than half of its peak of over $71 billion in 2024, and all four classes of preferred shares had fallen to historic lows.

Strategy responded by announcing on June 29 a share buyback plan of up to $1.25 billion, while also authorizing the sale of Bitcoin to supplement liquidity to cover preferred stock dividends and debt interest. In the weeks prior, on June 1, it made its first Bitcoin sale since 2022, selling only 32 Bitcoin. 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 tokens for cash during a bear market is a constraint that direct Bitcoin holding does not face—a risk unique to stocks.

This is the backdrop to ARK's contrarian buying. On June 25, as crypto stocks collectively plunged, Wood's funds purchased $3.27 million worth of Robinhood in a single day, while also adding to Coinbase, Circle, and Bullish. Wood believes Bitcoin's long-term target price is in the millions, and the current environment presents a deep discount opportunity to invest in crypto public companies that have experienced significant pullbacks since their 2025 highs.

The data reveals the true nature of these companies.

• Strategy = leveraged Bitcoin + equity dilution risk;

• Circle = stablecoin payment company deeply engaged in market share battles;

• Robinhood = comprehensive broker, crypto is just a side business.

Wood's bundle of these stocks is essentially a bet on a combination of different business models, with each company's crypto exposure varying widely.

Each individual stock has its own investment logic. Coinbase has outperformed Bitcoin YTD, Robinhood has held its early-year price, and the mining sector leads in overall returns. But the core question remains: Is buying crypto stocks truly less risky than directly holding Bitcoin?

Data from nine public companies shows that stocks either amplify Bitcoin's volatility or add business risks unrelated to price movements.

This year's truly strong crypto stocks rely on independent growth businesses like AI computing power, brokerage traffic, and payment products, with Bitcoin being only a secondary influencing factor.