On Thursday (February 25), Catherine Wood, Founder, CIO, and CEO at ARK Investment Management, LLC (aka “ARK” or “ARK Invest”), talked about Bitcoin while speaking as part of a panel for the Bloomberg Crypto Summit.
With regard to Bitcoin’s market cap potential, this is what she had to say:
“We are so early. That $950 billion dollar market cap gives you a sense of network value, gives you a sense of how early we are. And the various use cases that we have written about… as institutions move in, where an appropriate asset allocation will be given risk and return parameters, various ones, and we also have dimensions, the use cases, the insurance policy that this represents against not only unhinged monetary policy but outright confiscation of wealth in other countries, demonetisation, trade settlement…
“When you aggregate all of these use cases for Bitcoin and assume a conservative allocation, let’s say that in the terms of cash or insurance policies, you do get into the trillions of dollars of market cap potential out there.”
According to a report by MarketWatch, Wood also said that Bitcoin could one day replace bonds:
“You think about the traditional 60/40 stock-bond portfolio, but look what’s happening to bonds right now. If we are ending a 40-year secular decline in interest rates, that asset class has done its thing. What’s next? We think crypto could be the solution…
“We know there’s a concern given all the quantitative easing and the no-rules based monetary policy out there. Fixed income has done 40 years of really hard work… If Bitcoin represents a new asset class, why not invest in it.“
The report went on to say that Wood also talked about how the fall of the U.S. dollar index has acted as a positive catalyst for Bitcoin but not for gold:
“The dollar dropping 7% on a trade-weighed basis last year and falling further this year is another stimulus. It should be a stimulus for gold, but Bitcoin is getting the incremental flows that might go to gold.“
On February 24, the ARK Invest CEO also talked about Bitcoin, this time during an interview on Bloomberg TV.
“We’re very positive on Bitcoin again, very happy to see a healthy correction here. No market is straight up; everyone should know that. Everyone should have some dry powder for for days like these, and I’ve been saying that for a while. We see so many use cases of Bitcoin, but yeah probably the the most important use case is an insurance policy around the world against confiscation of wealth, and that can happen in two ways.
“It can happen with inflation. Bitcoin, I think, is the best hedge against inflation out there far none and better than gold.
“And it can happen outright. I mean, when you saw in the Middle East a prince seize his own relative’s wealth… everyone should know [that] if you think there’s a 5% chance of that happening, you should put 5% of your portfolio or your wealth into something like Bitcoin…“
And on February 2, in an interview with Yahoo Finance, Wood said that ARK Invest was not shocked by institutional investors’ move into crypto:
“We have been expecting institutions to start moving into Bitcoin and other cryptoassets, but primarily Bitcoin, the most secure of the blockchains, because if you look at the correlation of Bitcoin’s performance relative to any other asset class, it has the lowest correlation, meaning if you buy some Bitcoin, you will further diversify your portfolio and increase your returns with lower risk...
“Institutions look for that low correlation. Bitcoin has it. That’s clear. We have 10 years of history now.”