Ark Invest’s Cathie Wood defends bitcoin as an inflation hedge in crypto panel with Elon Musk

Cathie Wood
Cathie Wood

  • Cathie Wood defended bitcoin’s role as an inflation hedge during a panel with Jack Dorsey and Elon Musk.
  • The Ark Invest founder and CEO said bitcoin will serve as an inflation hedge in emerging market countries.
  • She said citizens in emerging markets with “significant inflation” will migrate to bitcoin and other means to preserve their purchasing power.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Ark Invest founder and CEO Cathie Wood defended bitcoin’s role as an inflation hedge during a Wednesday panel discussion alongside Jack Dorsey and Elon Musk.

The fund manager said bitcoin will serve as a hedge against inflation in certain situations, citing emerging markets as an example.

“There are a lot of emerging markets that are suffering from significant inflation-in other words, the purchasing power of those populations is going down. So they are going to migrate to bitcoin and other ways to preserve purchasing power,” Wood said.

She made the remarks when asked what advice she would give for institutions looking to put bitcoin on their balance sheets. Wood added that being able to sell to people who have migrated to bitcoin in inflationary situations would be “very useful” for corporations.

Earlier in the panel, Wood discussed how bitcoin’s fixed supply of 21 million tokens helps it’s role in preserving purchasing power.

Read the original article on Business Insider

Cathie Wood’s Ark Invest is working with provider 21Shares to create a bitcoin ETF

Cathie Wood

Ark Invest – the firm run by star stock picker Cathie Wood – has partnered with exchange-traded fund provider 21Shares to to create a bitcoin exchange-traded fund, according to a filing with the Securities and Exchange Commission.

The ARK 21Shares Bitcoin ETF will track the S&P Bitcoin index and trade on the Cboe BZX Exchange under the ticker ARKB. Its investment objective is quite simple: track the price of bitcoin.

A prominent bitcoin bull, Wood has been loading up on bitcoin-related investments such as Grayscale Bitcoin Trust and Coinbase Global over the last few months.

The proposed bitcoin ETF joins a long list of over a dozen applications waiting for approval from the SEC. The agency for its part has recently postponed another decision to approve a bitcoin ETF.

Bitcoin has gained mainstream adoption of late, soaring above a market capitalization of $1 trillion. It has however been trading rangebound in the past days at just half of its $64,000 peak in April.

Read more: Here are 3 altcoins that could surge by 1000% – including the eco-friendly version of bitcoin – according to a crypto analyst and entrepreneur who vets early-stage projects

Read the original article on Business Insider

Cathie Wood reiterates $500,000 long-term bitcoin price target amid deep crypto sell-off

Cathie Wood
  • Cathie Wood’s Ark Invest reiterated its view that bitcoin will climb to $500,000 over the long term.
  • Wood spoke with Bloomberg on Wednesday with a bullish outlook for the cryptocurrency, even amid a sharp decline in the space.
  • “We go through soul searching times like this and scrape the models, and yes, our conviction [on bitcoin] is as high,” Wood said
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

A 33% decline in bitcoin over the past two days hasn’t shaken Cathie Wood’s confidence in the cryptocurrency, as she reiterated Ark Invest’s view that it will trade to $500,000 in the long-term.

“We go through soul searching times like this and scrape the models, and yes, our conviction [on bitcoin] is as high,” Wood said in an interview with Bloomberg on Wednesday.

Ark Invest’s $500,000 bitcoin price target is predicated on the scenario where all institutional asset managers allocate upwards of 5% of their portfolios to the cryptocurrency.

But the rise of bitcoin to more than $60,000 earlier this year also put a spotlight on its high energy consumption, which is partially powered by fossil fuels like coal and natural gas. This led Tesla CEO Elon Musk to halt the EV manufacturer’s acceptance of bitcoin as a form of payment for its products.

But that thinking around bitcoin and its environmental impact is misguided, according to Ark Invest, as it believes the cryptocurrency will accelerate the adoption of solar and other forms of renewable energy.

As to whether bitcoin continues to move much lower from current levels, Wood admitted that it’s possible.

“You never know how low is low when a market gets very emotional,” Wood said, observing that many traders dumped their position after bitcoin traded below its 200-day moving average around the $40,000 level.

But any further decline may represent a solid buying opportunity, Wood said, as she believes bitcoin has entered a capitulation mode.

“We were looking at all the indicators this morning. They are all suggesting that we are in the capitulation phase, which is a really great time to buy, no matter what the asset is. A capitulation phase is buy, it’s on sale,” Wood said.

Wood’s Ark Invest is taking advantage of the recent decline in cryptocurrencies, as the firm has been buying shares of crypto-exchange Coinbase in several of its ETFs amid the decline, according to ARK’s daily trading report.

Read more: Cathie Wood and her analysts break down the multi-billion-dollar space opportunity – and explain why an infrastructure stock and ARK’s 3D Printing ETF are among the top holdings in their Space Exploration and Innovation ETF

Read the original article on Business Insider

Cathie Wood says digital wallets will ‘gut’ traditional banks – and expects bitcoin to rise by as much as $400,000

cathie wood ceo ark invest profile 2x1

Ark Invest’s Cathie Wood said on Benzinga’s “Raz Report” show Wednesday that the growth of digital wallets will “gut” traditional banks, and she remains bullish on bitcoin and Tesla.

Wood, who is known for her strategy of investing in highly disruptive companies, counts Tesla as one of the major stock picks in her $24.4 billion ARK Innovation exchange-traded fund. The automaker accounts for roughly 10% of the fund’s portfolio. Earlier this month, Tesla pulled off its biggest bitcoin endorsement yet by revealing a $1.5 billion investment in the digital asset.  

Jack Dorsey’s payments firm Square also disclosed an additional $170 million investment, bringing its total bitcoin holdings to 5% of its balance sheet. If other US companies follow this trend, the price of bitcoin could rise by between $40,000 and $400,000, according to Wood.

Bitcoin fell 2%, to $49.311, on Thursday, but its price is up 70% year-to-date.

Wood is convinced Tesla’s head-start in autonomous driving remains attractive. Companies that outperformed in the stay-at-home environment during the pandemic, such as Roku and Zoom, are other attractive stocks, owing to their expected growth rate over the next five years, she said. 

She said shares in Zoom are “probably undervalued” and that Roku and Amazon “will take the lion’s share of the connected TV market.”

Wood said her fund remains “opportunistic” despite recent decline in the S&P 500 that has been driven by  concerns about lofty valuations and chances of higher inflation. “The benchmarks are filling up with value traps” due to growing innovation in fields including artificial intelligence and robotics, she said. “We think the big risk is in the benchmarks, not what we’re doing.” 

The Nasdaq Compose closed 2.7% lower on Wednesday as tech stocks plummeted after disappointing labor-market data and a rise in Treasury yields, while the S&P 500 fell 1.3%.

Reuters first reported Wood’s comments from the show.

Read the original article on Business Insider