Cathie Wood, the CEO of Ark Invest, recently shared her insights on the macroeconomic landscape of Bitcoin and current financial developments during an appearance on Merryn Somerset Webb’s show, ‘Merryn Talks Money.’ However, what particularly piqued the interest of the cryptocurrency community was her stance on BTC, the leading digital currency.
When asked by Merryn to choose between gold, cash, and BTC as a long-term investment for the next 10 years, Wood unequivocally favored Bitcoin, stating, “Bitcoin hands down.” She underscored that while both BTC and gold offer hedging capabilities, gold had its time in the spotlight, whereas BTC, in her view, is a “new” asset gaining momentum.
Highlighting Bitcoin’s growth potential and the “incremental demand” it’s witnessing, Wood pointed out that institutional involvement in BTC is still in its early stages. She also emphasized that the forthcoming generation of investors, often referred to as the “young people” by Wood, would likely prefer to hold Bitcoin over gold. Additionally, she noted that BTC has outperformed gold recently in terms of its hedging attributes.
Wood’s bullish stance on BTC may not come as a surprise, considering that her company, ARK Invest, is among the asset management firms that have submitted applications to the US Securities and Exchange Commission (SEC) to launch a Spot BTC ETF. Interestingly, her firm is leading the race for approval, with the SEC expected to make a decision, possibly an approval, in January 2024, while decisions on other applications are anticipated to follow. However, it’s worth noting that the SEC may choose to approve all funds simultaneously.
Recognizing Bitcoin’s Significance
During the interview, Wood also discussed how her company monitors the price of BTC in the context of financial markets and its implications for assessing inflation rates. She pointed out the fascinating rise in Bitcoin’s price from $19,000 to $30,000 during the regional banking crisis in March, a period marked by the collapse of banks like Silicon Valley Bank.
Wood described Bitcoin’s surge during this crisis as “fascinating” and highlighted how many viewed the cryptocurrency as a “flight to safety” asset. While Bitcoin has often been touted as a hedge against inflation, Cathie Wood believes it can also serve as a hedge against deflation due to its lack of counterparty risk.