Cathie Wood Turns Clarity Act Panic into Profit: $16 Million Circle Buy Already Up $1 Million

Circle Internet Group (NYSE:CRCL) shares plunged astir 20% connected Tuesday aft the latest draught of the long-awaited Clarity Act surfaced successful Congress. The bill’s caller connection appeared to prohibition stablecoin issuers from offering output simply for users holding tokens similar USDC (CRYPTO:USDC), sparking fears that Circle’s halfway concern exemplary could instrumentality a hit.

Investors dumped the stock, dragging different crypto names little successful sympathy. But Cathie Wood’s ARK Invest funds spotted accidental successful the chaos. On the aforesaid day, the steadfast scooped up much than $16 cardinal worthy of Circle shares. It present looks similar a classical Wood contrarian stake arsenic analysts accidental the marketplace severely misunderstood the bill’s intent. In greeting trading today, Circle's banal was up astir 7% handing Wood’s funds much than $1 cardinal successful unrealized gains connected the position.

The Clarity Act is Congress’s bipartisan propulsion to make a broad U.S. regulatory model for integer assets. The latest Senate draft, led by Senators Thom Tillis and Angela Alsobrooks, draws a crisp enactment connected stablecoins. It prohibits platforms from paying users “interest-like” output solely for holding a stablecoin successful a wallet oregon relationship -- thing that could beryllium seen arsenic economically equivalent to a slope deposit. The extremity is to support accepted banking and forestall stablecoins from functioning arsenic unregulated savings vehicles.

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Importantly, the measure carves retired country for rewards tied to “bona fide activity.” Payments processing, trading, lending, loyalty programs, and different genuine usage incentives would inactive beryllium allowed. The authorities besides directs regulators to finalize rules wrong a year, giving the manufacture the regulatory, well, clarity it has agelong sought. Far from a decease stroke to stablecoins, the measure aims to legitimize the assemblage portion drafting boundaries that support it from competing straight with insured slope deposits.