Woofun AI reports that Cathie Wood, founder of ARK Invest, has intensified her contrarian position on Circle Internet Group, significantly increasing holdings despite a severe 42% decline in the stock's value over the past year. This aggressive accumulation strategy stands in stark contrast to the prevailing sentiment among traditional financial institutions, as Wood publicly criticized Wall Street analysts for their inability to grasp the disruptive potential of digital assets, attributing their skepticism to a career-long fixation on legacy payment processors like Visa and Mastercard.

The divergence between Wood's thesis and market reality is anchored in Circle's role as the issuer of USDC, a stablecoin fully backed by cash and U.S. short-term Treasury bonds. While the broader crypto market has faced volatility, Circle has emerged as a cornerstone asset within ARK Invest's flagship fund.

However, the stock's performance has been notably weak, shedding 42% of its value over the last twelve months. This depreciation has not deterred Wood; instead, it has reinforced her belief that the market is mispricing the long-term utility of stablecoin infrastructure, viewing the current downturn as a temporary inefficiency rather than a fundamental flaw in the business model.

Wood's criticism targets the structural bias inherent in traditional financial analysis, which she argues is rooted in the professional backgrounds of most equity researchers. She contends that many analysts spent their careers evaluating established entities like Visa and Mastercard, leading to a blind spot when assessing newer, technology-driven disruptors. This perspective was highlighted in response to a chart created by Artemis analyst Alex Obchakevich, which illustrated shifting market perceptions regarding profit distribution in the stablecoin sector. The data presented a stark comparison of one-year stock performance: Visa rose by approximately 5%, Mastercard by about 1%, while Circle plummeted by 42%, underscoring the disconnect between traditional payment giants and emerging crypto-native firms.

In her defense of Circle, Wood invoked historical precedents to argue that current valuations do not reflect future growth potential. She noted that CRCL's stock price had risen by 84% since its initial public offering, a figure she used to illustrate the short-term inefficiency of the public stock market. Wood pointed out that while many financial services analysts base their long-term strategies on studying Visa and Mastercard, they fail to recognize the transformative power of technology in reshaping the payment industry. She argued that Circle deserves to see significant growth, drawing parallels to the massive appreciation seen in traditional payment networks over decades.

To support her argument, Wood cited specific historical multiples, claiming that Mastercard's stock price has risen by approximately 150 times since its listing, while Visa's has increased by around 33 times. She suggested that the analysts who advised clients to buy these companies at low prices were prescient, and that similar opportunities exist for Circle today.

However, this comparison relies on accurate historical data, which requires careful verification. The multiplication factors for the rise in the stock prices of these two traditional payment giants, as cited by Wood, are largely accurate, but the context of their growth trajectories differs significantly from Circle's current market position.

Woofun AI data shows that a detailed fact-check reveals that Mastercard's IPO price in 2006 was $39, which, after a 1:10 stock split, equates to an adjusted price of $3.9 per share. Compared to its closing price of $580.63 last Friday, this represents a rise of about 149 times, closely aligning with Wood's claim of 150 times. Similarly, Visa's IPO price in March 2008 was $44, and after a 1:4 split in 2015, its adjusted price was $11. With a closing price of $371.04 last Friday, Visa's stock has risen by about 34 times, consistent with Wood's estimate of 33 times. These calculations confirm that Wood's historical references for Visa and Mastercard are mathematically sound, lending credibility to her broader argument about long-term value creation.

However, Wood's figures regarding Circle's own performance contain a significant inaccuracy. Circle went public in June 2025 at an IPO price of $31. Its closing price last Friday was $87.98, representing an actual rise of about 184%, not the 84% she mentioned. This discrepancy undermines the precision of her argument, even if the underlying thesis—that Circle is undervalued—remains intact. The error highlights the challenges of communicating complex financial data in public forums, where simplified narratives can sometimes obscure factual details. Despite this mistake, the core message persists: Wood believes that the market is underestimating Circle's potential for exponential growth.

Wall Street's valuation of Circle remains deeply fragmented, reflecting a lack of consensus on how to price a stablecoin issuer. Of the 21 analysts following the stock, 11 gave a strong buy rating, 2 gave a buy rating, 5 held a neutral stance, and 3 recommended selling. The target prices assigned by these analysts vary greatly, ranging from a most optimistic $173 to a most pessimistic $37. This wide disparity means the target price for the same company can differ by as much as 4.7 times on the same day, with the average target price being $98.61. Such extreme divergence is uncommon for mature payment networks and suggests that there is no unified valuation framework for Circle, leaving investors to navigate a landscape of conflicting opinions.

The business model risks further complicate the valuation debate. A large portion of Circle's revenue comes from interest earned on its reserves, which will decline if interest rates fall. Its other revenues depend heavily on the adoption rate of stablecoins, a metric that remains volatile and uncertain. Circle's earnings reports reflect this contradiction: the earnings report for the second quarter of 2026, released in early August, showed that the company's revenue grew by about 37% and it became profitable, yet its market cap still fell by 30%.

Additionally, the competitive landscape is intensifying, with Circle developing its own technical stack based on its Arc blockchain, while the OpenUSD alliance, composed of over 140 institutions, aims to compete in the same payment infrastructure space.

ARK Invest's commitment to Circle is evident in its portfolio allocation, which holds 3,931,968 shares worth $329 million, accounting for 5.14% of the fund's total assets. This stake is larger than Coinbase's position, signaling Wood's high conviction in Circle's long-term prospects.

However, the market has not yet reached a consensus on Circle's true value, as evidenced by the huge difference between target prices of $37 and $173. This lack of agreement underscores the uncertainty surrounding stablecoin issuers and highlights the risk inherent in betting on a company whose valuation metrics are still being defined by the market.