ARK aggressively buys crypto-concept stocks: lower risk or double pressure?

Original Author: Andjela Radmilac

Original Translation: Luffy, Foresight News

ARK Invest, led by Cathie Wood, purchased a total of $77 million worth of publicly listed crypto 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 to Coinbase, $25.25 million to Circle, and $8.2 million to Bullish.

For years, Wood and numerous institutions have adhered to the same investment logic: publicly listed crypto companies offer investors a compliant channel to gain exposure to the crypto industry cycle's benefits 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 annualized 30-day realized volatility range for nine US-listed crypto companies is 68%–90%, nearly double Bitcoin's 37.6% volatility. Extending the timeframe to 90 days, Circle's volatility reaches 103.6%, while Bitcoin's is only 37.8%. The disparity in drawdowns from highs is equally notable: Circle has dropped 51.4% from its peak, MSTR 48.6%, and Bullish 43.6%; meanwhile, Bitcoin has declined 36.4% from its January high of nearly $97,000, a smaller loss than any of these individual stocks.

30-Day Annualized Realized Volatility for BTC, ETH, and Nine US-Listed Crypto Stocks from January 1 to July 2, 2026

Looking solely at volatility, crypto stocks appear to be leveraged Bitcoin positions, but correlation data reveals a completely different reality. Over the past 90 trading days, the correlation coefficients for Circle, Robinhood, and Bullish with Bitcoin are only 0.55–0.58 (where 0 signifies no correlation and 1 means perfect synchronicity). This indicates that Bitcoin price movements explain only about one-third of the volatility in these crypto company stocks; the remaining two-thirds stem from company-specific risks: quarterly earnings, industry competition, financing activities, equity dilution, etc. Investors aiming to gain crypto exposure through stocks end up with only partial Bitcoin price exposure while assuming 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 from late 2025 to date. The Beta coefficient represents the expected percentage change in the corresponding stock for every 1% change in Bitcoin.

Only MSTR in the entire market qualifies as a Bitcoin substitute. With a Beta of 1.59 and a correlation of 0.85, it is essentially an equity instrument that holds Bitcoin with leverage. In the current downturn, its year-to-date decline and drawdown from highs far exceed those of Bitcoin.

Coinbase is a relatively balanced choice, with a year-to-date decline of -26.8%, slightly less than BTC. It has a Beta of 1.26 and a correlation coefficient of 0.75, making it the second most closely linked stock to Bitcoin within the sector. However, its volatility remains nearly double that of Bitcoin. Its stock price is down 60.6% from its July 2025 all-time high of $419.78, meaning investors who bought at that peak have suffered far greater losses than those who bought Bitcoin at its own all-time high in October 2025.

Circle perfectly exemplifies "corporate risk under a crypto guise." It has the lowest correlation with Bitcoin in the entire sector but the highest 90-day volatility. The catalyst occurred on June 30: the launch of the Open USD stablecoin, backed by over 140 companies including Coinbase, Stripe, Visa, Mastercard, and BlackRock, caused CRCL to plummet 17.5% in a single day. This sharp decline had almost nothing to do with Bitcoin's market performance; it was purely a company-specific negative event stemming from competition for market share in the stablecoin arena.

Robinhood presents the opposite case, also demonstrating that individual stock performance can be independent of crypto market trends. The stock is down only 0.3% year-to-date, with a maximum drawdown of just 8.5%. Its crypto business is merely a small part of a larger brokerage platform offering stocks, options, and derivatives. This diversified business model buffers against downturns; conversely, during a crypto bull market, it is unlikely to provide substantial crypto-related returns for investors.

Mining companies show the most anomalous trend. While Bitcoin is down 29.5% year-to-date, RIOT has surged 74.5%, MARA is up 38.1%, and CleanSpark has gained 24.7%. The core logic is the miners' pivot to becoming AI high-performance computing service providers, signing billions of dollars in computing power lease contracts and continuously reducing their Bitcoin treasury holdings. Although their daily price movements still correlate with Bitcoin (all have Betas greater than 1), their full-year returns are entirely driven by the AI hosting business, decoupling from Bitcoin's price.

Year-to-Date Price Change for BTC, ETH, and Nine US-Listed Cryptocurrency Stocks

Bitcoin's own volatility is not insignificant. The Volmex Bitcoin 30-day volatility index hit a low of 24.5 in late May, peaked at 68.7 in early February, and had rebounded to 41.6 by early July. Even so, the vast majority of crypto stocks still exhibit double the volatility.

The Strategy Case: Capital Structure Adds Incremental Risk

Holding Bitcoin only entails the risk of its price fluctuating. Buying shares in a publicly listed crypto company adds multiple variables: business operations, equity dilution, the disappearance of valuation premiums, financing pressures, and changes in capital structure.

Strategy has exposed all these risks acutely in the past month. At the end of June, its price-to-book (mNAV) multiple fell below 1 for the first time. This metric compares the company's total market valuation to its net assets. A multiple below 1 means the market values the entire company for less than the cash and Bitcoin it holds. As disclosed on June 22, Strategy held 847,363 Bitcoins. On the day mNAV dropped below 1, that Bitcoin stash was worth approximately $50 billion.

An mNAV greater than 1 is the foundation of Strategy's entire growth flywheel. Historically, the company could issue common or preferred stock at a premium, use the proceeds to buy more Bitcoin, and increase its Bitcoin holdings per share. Once mNAV falls below 1, this cycle reverses and erodes shareholder value—issuing shares to buy Bitcoin becomes equivalent to selling existing Bitcoin assets at a discount.

CryptoSlate reported as early as January that Bitcoin-holding companies can be categorized into those trading at a premium and those at a discount. At the end of June, Strategy's total market cap was $29.54 billion, less than half its peak of over $71 billion in 2024, with all four classes of preferred stock trading at historic lows.

Strategy unveiled a response plan on June 29, announcing a stock buyback program of up to $1.25 billion while also authorizing the sale of Bitcoin to supplement liquidity for covering preferred stock dividends and debt interest. Weeks earlier, on June 1, the company made its first Bitcoin sale since 2022, selling a mere 32 BTC. Following the announcement, the stock surged 12.6% in a single day, ending an eight-day losing streak. The world's largest corporate holder of Bitcoin needed to sell its holdings to generate cash flow during a bear market—a constraint not faced by directly holding Bitcoin and a risk unique to stocks.

This is the backdrop against which ARK made its contrarian purchases. On June 25, during a broad sell-off in crypto stocks, Wood's fund bought $3.27 million worth of Robinhood shares in a single day, while also adding to positions in Coinbase, Circle, and Bullish. Wood believes Bitcoin's long-term target price is in the millions of dollars and is currently positioning at what she sees as deeply discounted prices in publicly listed crypto companies that have significantly corrected since their highs in 2025.

The data reveals the true nature of these companies.

• Strategy = Leveraged Bitcoin + Equity Dilution Risk;
• Circle = A stablecoin payment company deeply engaged in a market share battle;
• Robinhood = A diversified brokerage firm where crypto is just a side business.

By buying a basket of these stocks, Wood is essentially betting on a combination of different business models, each with vastly different levels of crypto exposure.

Each stock has its own independent investment thesis. Coinbase has outperformed Bitcoin year-to-date, Robinhood has held its price from the start of the year, and the mining sector leads in overall returns. Yet the core question remains: Do buying crypto stocks actually carry lower risk than holding the coin directly?

Data from nine publicly listed companies show that stocks either amplify Bitcoin's volatility or add operational risks unrelated to the crypto price.

The truly strong performers among cryptocurrency stocks this year rely on independent growth businesses like AI computing power, brokerage traffic, or payment products. Bitcoin's price is only a secondary influencing factor.