In a recent appearance on CNBC’s “Squawk Box,” ARK Invest CEO and CIO Cathie Wood engaged in a comprehensive discussion with co-anchor Andrew Ross Sorkin about Bitcoin’s future.
Bitcoin’s Price Trajectory and ARK’s Forecast
Wood, known for her forward-looking views on technology and finance, reaffirmed her firm’s bullish stance on Bitcoin. She referenced ARK Invest’s “Big Ideas” report, which outlines the foundational elements of their price forecast for Bitcoin. The report details a base case scenario where Bitcoin could reach around $600,000. More notably, Wood highlighted that their bull case scenario, which has gained probability due to the recent U.S. SEC’s approval of multiple spot Bitcoin ETFs, projects Bitcoin to soar to $1.5 million by the year 2030.
Bitcoin as a Revolutionary Monetary System
Wood emphasized the significance of Bitcoin, describing it as the first global, decentralized, digital, rules-based monetary system in history. She underscored the groundbreaking nature of this technology, suggesting that it represents a major shift in the global financial paradigm.
Bitcoin’s Role as a Currency
Addressing the question of whether Bitcoin needs to evolve from being an asset to a recognized currency to achieve these numbers, Wood affirmed this transition. She recalled ARK’s first paper on Bitcoin from 2015, which is still available on their website. This paper explored Bitcoin’s potential to fulfill the three traditional roles of money: a store of value, a means of exchange, and a unit of account. Wood’s conclusion was affirmative, indicating that Bitcoin could indeed serve all these roles effectively.
The Convergence of AI and Bitcoin
Wood also touched upon the intersection of artificial intelligence and Bitcoin. She mentioned a “Bitcoin Brainstorm” session with their partner, Bitcoin Park in Nashville, which delved into how this convergence could redefine the division of labor. She predicted a significant impact on the gig economy, particularly in emerging markets like Africa, where this transformation is already underway.
The Underappreciated Efforts of Developers
Finally, Wood highlighted the often-overlooked efforts of developers worldwide who have been diligently working on Bitcoin’s infrastructure. She pointed out the importance of the Lightning Network in leveraging Bitcoin’s base layer, indicating its crucial role in Bitcoin’s future growth and adoption.
On 10 January, Cathie Wood, CEO of ARK Invest, appeared on Fox Business with Liz Claman. During the interview, Wood shared her initial confusion and subsequent realization that the SEC’s Twitter account had been compromised, leading to false information about the approval of spot Bitcoin ETFs.
Claman brought up a Standard Chartered report predicting $50-$100 billion inflows into these new ETFs this year. This report, released on 8 January by Geoff Kendrick and Suki Cooper of Standard Chartered’s Global Research, was titled “Bitcoin – Price upside from US spot ETF approval.” It highlighted the potential approval of Bitcoin spot ETFs by the SEC as a pivotal moment for mainstreaming Bitcoin among institutional investors, potentially leading to significant inflows and a rise in its price.
The report drew comparisons with the impact of the first U.S.-based gold ETP in 2004, which quadrupled gold prices in about seven to eight years. Standard Chartered expects an even faster impact on Bitcoin prices due to the spot ETFs, projecting Bitcoin to reach $100,000 by the end of 2024. This is based on the anticipated quicker development of the Bitcoin ETF market compared to gold.
Furthermore, the note predicts Bitcoin could reach about $200,000 by the end of 2025, assuming significant ETF-related inflows. This forecast hinges on the expectation that U.S. spot ETFs will acquire between 437,000 and 1.32 million new bitcoins by the end of 2024, translating to an inflow of approximately $50-100 billion.
Wood discussed ARK’s strategy of reducing fees to 0.21 basis points after accumulating $1 billion in investments, underscoring their dedication to making Bitcoin accessible as a public good and a new asset class. She reiterated Bitcoin’s importance as both a technology and an asset class, reflecting on ARK’s early investment in Bitcoin in 2015 and their ongoing commitment to the cryptocurrency.
Regarding ARK’s recent divestment of Coinbase shares, Wood clarified that it was a routine portfolio rebalancing move. Following a substantial increase in Coinbase’s value, ARK redistributed investments, focusing more on opportunities in the multiomics sector.
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