Cathie Wood of ARK Investment Management champions Bitcoin over gold and cash as a long-term hedge against deflation, in light of technological advancements.
In a recent podcast with Bloomberg’s Merryn Somerset Webb, CEO of ARK Investment Management Cathie Wood shared her conviction in Bitcoin as the prime asset for potential deflation hedge over the next decade.
Wood’s stance comes amidst a market climate heavily leaning towards the risks of heightened inflation, yet her bet on deflation is unwavering, citing transformative technologies like artificial intelligence, electric vehicles, robotics, genomic sequencing and blockchain as the driving forces behind her prediction.
Addressing the choice between Bitcoin (BTC), gold and cash as a 10-year hold, Wood’s response was clear-cut: “Bitcoin, hands down.” Her confidence in Bitcoin stems from its properties as a hedge against both inflation and deflation, highlighted by the absence of counterparty risk and its nascent institutional involvement, earning it the moniker “digital gold” in her view.
Wood’s bullish outlook on Bitcoin isn’t new; she has consistently voiced optimism for the cryptocurrency, intertwining its prospects with the broader expansion in technological innovation. Her prediction even stretches to a valuation exceeding $1 million per Bitcoin within the next decade—a bold statement considering the current price stands around $35,000, down from its peak in 2021.
Despite a significant crash in 2022, Bitcoin’s recovery in the present year has sparked discussions of its viability as an inflation hedge. The crypto industry has recently seen a surge due to speculation about the U.S. Securities and Exchange Commission’s potential approval of Bitcoin exchange-traded funds (ETFs).
Wood’s ARK Investment Management is poised to gain from any positive regulatory shifts concerning Bitcoin ETFs. The firm has already lodged an application for such an ETF in partnership with 21Shares and has invested in the Grayscale Bitcoin Trust (GBTC). The trust is a significant element in ARK’s $1.2 billion ARK Next Generation Internet ETF, and it saw substantial returns this year, outpacing Bitcoin itself.
Wood also anticipates a synergistic relationship between AI and Bitcoin, envisioning a future where micro tasks are globally accessible, and labor is divided in ways “we can’t even imagine now.” This futuristic outlook showcases Wood’s broader vision of a world where technology and digital currency redefine economic fundamentals.