Bitcoin: Cathie Wood’s Bullish Bet and the Evolution of Digital Gold
Cathie Wood, CEO of ARK Investment Management, advocates strongly for Bitcoin as a long-term investment, favoring it over traditional assets like gold or cash.
She foresees Bitcoin as a shield against potential deflation in the coming decade. Wood bases her viewpoint on the rise of new technologies such as artificial intelligence, electric vehicles, robotics, genomic sequencing, and blockchain, which she believes will drive a phase of declining prices.
During a recent appearance on Bloomberg’s Merryn Talks Money podcast, Wood reaffirmed her confidence in Bitcoin as an investment. She emphasized its unique position as a hedge against both inflation and deflation due to its lack of counterparty risk and limited institutional involvement.
Describing it as “digital gold,” Wood remains resolutely positive about the cryptocurrency’s potential, despite its current value being approximately $35,000, nearly half its peak in 2021.
Despite a significant 64% decrease in Bitcoin’s value in 2022, the cryptocurrency has seen a more than 100% surge in its value this year. It gained attention as a potential hedge against inflation, although it did not act as expected during the recent surge in consumer prices.
Recent market activities indicate a renewed interest in Bitcoin, potentially tied to hopes for approval by the US Securities and Exchange Commission for exchange-traded funds directly investing in the cryptocurrency.
ARK Investment Management, led by Wood, has positioned itself strategically for potential ETF approvals, having applied for a Bitcoin ETF alongside 21Shares and invested in the Grayscale Bitcoin Trust.
The firm’s $1.2 billion ARK Next Generation Internet ETF acquired GBTC at a 40% discount last November, making it the fund’s largest holding and achieving approximately a 224% return this year, surpassing Bitcoin’s roughly 114% rally. ARK recently divested a portion of its GBTC holdings.
Wood also mentioned on the podcast the potential convergence between artificial intelligence and Bitcoin, envisioning a future where this fusion enables global micro-tasks and fundamentally reshapes the landscape of labor division in unforeseen ways.