Shares of Circle Internet Group shifted sharply this week after the USDC stablecoin issuer suffered a record 20.11% single-day plunge on March 24, closing at $101.17 from $126.64 and wiping out $5.6 billion in market value. The catalyst: a leaked draft of the U.S. CLARITY Act that could ban passive yield on stablecoins. Then, in a contrarian move that turned heads, Cathie Wood's ARK Invest purchased $20.45 million in Circle stock on March 24 , and the stock bounced +4.7% to $105.90 in pre-market Wednesday.

  • A Proposed Law Threatens Circle's Main Source of Income. The revised CLARITY Act bans any yield "directly or indirectly" on stablecoin balances — and Circle earns 96% of its revenue from interest on USDC reserves. In plain terms, Circle makes money by holding customer-backed dollars in U.S. Treasuries and pocketing the interest. Removing yield "weakens a key part of the bull case," said one strategist, arguing it limits USDC's path toward becoming a true store-of-value product.

The legislation has not yet passed , but Polymarket odds of it passing this year have jumped to roughly 68%.

  • ARK Sold Before the Crash, Then Bought the Dip — a Whiplash Move. ARK sold 45,998 shares worth $5.9 million on March 20 — four days before the plunge. Then it reversed course, buying 651,579 shares through its flagship ARKK and ARKW ETFs at the bottom. The pivot suggests Wood views the selloff as an overreaction, not a fundamental breakdown.

  • Some Analysts Say the Market Overshot. Clear Street analyst Owen Lau said "the actual situation doesn't appear to be as bad as the headline indicates" and called it "an overreaction."

Bitwise's head of research noted Circle is still up over 30% this year and predicted "there will be workarounds," such as loyalty programs replicating yield incentives.

  • Circle's Business Is Growing, but the Valuation Was Stretched. Circle reported $770 million in Q4 2025 revenue, beating the $745 million consensus, with earnings per share of $0.43 versus the $0.35 estimate. But the stock had surged 100–160% in just six weeks , leaving it vulnerable. At $25 billion in market cap and a negative P/E ratio of -186 , the stock was priced for perfection that legislation now threatens to interrupt.

Bottom line: ARK's dip-buy is a high-conviction bet that Congress won't kill stablecoin yield — or that Circle can adapt if it does. Shareholders should watch the April markup closely.