ARK aggressively buys crypto concept stocks: Lower risk, or double exposure?

Original Author: Andjela Radmilac

Original Translation: Luffy, Foresight News

In June, ARK Invest, helmed by Cathie Wood, purchased a total of $77 million worth of stocks in publicly traded crypto companies. According to ARK's daily trading disclosures, the fund added $44 million in Coinbase, $25.25 million in Circle, and $8.2 million in Bullish during what was Bitcoin's worst monthly performance in four years.

Wood, along with several institutions, has adhered to the same investment thesis for years: publicly traded crypto companies offer investors a compliant channel to participate in the crypto industry cycle's dividends without directly holding Bitcoin. However, an analysis of market data by CryptoSlate as of July 2nd reveals the significant hidden costs of this stock investment path.

The annualized 30-day realized volatility for nine US-listed crypto companies ranges from 68%–90%, nearly double Bitcoin's 37.6% volatility. Extending the timeframe to 90 days, Circle's volatility hits 103.6%, compared to Bitcoin's 37.8%. The disparity in drawdowns is equally stark: Circle has dropped 51.4% from its highs, MSTR by 48.6%, and Bullish by 43.6%; meanwhile, Bitcoin has fallen 36.4% from its January high of nearly $97,000, with all individual stocks experiencing larger declines.

30-Day Annualized Realized Volatility for BTC, ETH, and Nine US-Listed Crypto Stocks (Jan 1 - Jul 2, 2026)

Looking solely at volatility, crypto stocks appear to be leveraged Bitcoin plays. However, correlation data reveals a different story. Over the past 90 trading days, the correlation coefficients of Circle, Robinhood, and Bullish with Bitcoin are only 0.55–0.58 (on a scale of 0 to 1, where 1 indicates perfect synchronicity and 0 indicates no correlation). This means that Bitcoin price fluctuations can explain only about one-third of the movement in these crypto company stocks. The remaining volatility stems from company-specific risks: quarterly earnings, industry competition, financing activities, equity dilution, etc. Investors seeking exposure to the crypto industry through stocks end up with only partial price exposure while taking on 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 the present. Beta represents the percentage change in the corresponding stock for every 1% movement in Bitcoin.

Across the entire market, only MSTR 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 have both significantly exceeded Bitcoin's.

Coinbase is a relatively balanced choice, with a year-to-date decline of -26.8%, slightly less than BTC. Its Beta of 1.26 and correlation coefficient of 0.75 make it the second strongest linkage to Bitcoin within the sector. However, its volatility remains nearly double that of Bitcoin. Its stock price has fallen 60.6% from its all-time high of $419.78 in July 2025, meaning losses for investors who bought at that peak are 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 entire sector and the highest 90-day volatility. The trigger occurred on June 30th: the Open USD stablecoin, backed by a consortium of over 140 companies including Coinbase, Stripe, Visa, Mastercard, and BlackRock, was officially launched, causing CIRC to plummet 17.5% in a single day. This crash had almost nothing to do with Bitcoin's market movement and was purely a company-specific negative catalyst stemming from competition for stablecoin market share.

Robinhood presents a contrasting case, also confirming that individual stock performance is 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 its larger brokerage platform for stocks, options, and derivatives. This diversified business buffer mitigates downside; conversely, during crypto bull markets, it struggles to provide substantial price-linked returns to investors.

Mining stocks have shown the most anomalous behavior. Bitcoin is down 29.5% year-to-date, yet RIOT has surged 74.5%, MARA is up 38.1%, and CleanSpark has gained 24.7%. The core logic is that mining companies are pivoting to become AI high-performance computing service providers, signing multi-billion dollar compute lease agreements and steadily reducing their inventory of mined Bitcoin. While their daily price movements still correlate with Bitcoin (Beta values are all greater than 1), their annual returns are entirely driven by AI hosting businesses, decoupling from the cryptocurrency price.

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

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. Even so, the volatility of the vast majority of crypto stocks is still double that of Bitcoin.

The Strategy Case: Structural Risks from Equity

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

Strategy recently exposed all these risks within a single month. At the end of June, its price-to-book multiple (mNAV) fell below 1 for the first time. This metric measures a company's total market valuation against its net assets. A multiple below 1 signifies that the market values the entire company less than the cash and Bitcoin it holds. As disclosed on June 22nd, Strategy held 847,363 Bitcoin. On the day its mNAV fell below 1, this Bitcoin stash was worth approximately $50 billion.

An mNAV greater than 1 is the foundation of Strategy's entire growth flywheel. Previously, the company could issue common and preferred stock at a premium, raise funds, and then buy more Bitcoin, increasing its per-share Bitcoin holdings. Once mNAV drops below 1, this cycle begins to erode shareholder value — issuing shares to raise capital for buying Bitcoin is equivalent to selling the underlying Bitcoin asset at a discount.

CryptoSlate reported as early as January that Bitcoin-holding companies fall into either valuation premium or discount types. At the end of June, Strategy's total market capitalization was $29.54 billion, less than half its peak of over $71 billion in 2024. All four classes of its preferred stock fell to historic lows.

Strategy formulated a response plan. On June 29th, it announced a stock buyback program of up to $1.25 billion, while simultaneously authorizing the sale of some Bitcoin to supplement liquidity for covering preferred dividends and debt interest. In the weeks prior, on June 1st, the company made its first Bitcoin sale since 2022, selling only 32 BTC. Following the announcement, the stock surged 12.6% in a single day, breaking an eight-day losing streak. The world's largest corporate Bitcoin holder needed to sell its holdings for cash flow during a bear market — a constraint that direct Bitcoin ownership avoids and is a risk unique to the stock.

This is the backdrop for ARK's contrarian buying. On June 25th, 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 its positions in Coinbase, Circle, and Bullish. Wood believes Bitcoin's long-term target price is in the millions of dollars and is currently using the significant discount to accumulate positions in publicly traded crypto companies that have deeply corrected 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 brokerage, crypto is a side business.

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

Every individual stock has its own investment logic. 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. However, the core question remains: Is buying crypto stocks truly less risky than directly holding the cryptocurrency?

Data from the nine listed companies shows that stocks either amplify Bitcoin's volatility or add company-specific operational risks unrelated to the crypto price.

The truly strong cryptocurrency stocks this year have relied on independent growth drivers like AI computing power, brokerage traffic, and payment products, with Bitcoin being only a secondary influencing factor.