Bitcoin is coming to the global gold market: Cathie Wood
Cathie Wood, founder and CEO of ARK Investment Management, said she believes one bitcoin could one day be worth $1 million, although not very soon.
Wood has spoken on topics ranging from interest rates to the emerging field of artificial intelligence (AI), and in a recent interview with Brazilian financial news portal Infomoney, he said he remains bullish on Bitcoin.
“Gold is a trillion-dollar asset, and we think Bitcoin will get a significant portion of that,” Wood said, explaining how BTC could reach $1 million per coin. According to Wood, the comparison is not just about cost, but also about the fundamental role that Bitcoin can play as a decentralized and private alternative to traditional currencies.
Wood also noted that he sees Bitcoin playing a critical role in emerging markets as a hedge against unstable monetary and fiscal policies for individuals and institutions.
“Most emerging markets will use something like Bitcoin as an insurance policy,” he explained, noting Bitcoin’s wide range of uses.
According to Wood, Bitcoin represents a new era in finance: the first global, digital and decentralized monetary system. This is a pioneering development, especially in light of the closure of the US gold window in 1971. His conclusions, he argued, were based on the scarcity, security and growing acceptance of Bitcoin in the investment community.
“So we think the value of scarcity will increase as institutions emerge,” he said, adding that the path to a million-dollar token requires just a little more trust. “Right now we’re in the $40,000 to $43,000 range. It won’t take long as institutions allocate 2% to 5% (of Bitcoin) to their assets and we will get there easily.”
With widespread adoption, which she believes can be achieved if institutions include some BTC in their portfolios directly or through ETFs, Bitcoin’s reputation as a risky investment will fade as its positive characteristics provide benefits.
If cryptocurrencies prove to be a new asset class, their correlation with other alternative assets will decrease, which could increase their appeal among investors, Wood said.
“Institutions know that if a new asset class emerges, the correlation of returns with other asset classes will be lower, and this usually means that the return per unit of risk on adding Bitcoin to their portfolios will increase, and institutional investors know they cannot miss these opportunities,” – he said.
Cathie Wood talks to Infomoney
Katie’s views on artificial intelligence
The conversation with Wood soon turned to artificial intelligence and its profound impact on productivity and innovation. She expressed great confidence in the continued growth and importance of AI, highlighting the rapid progress in the field. In particular, Wood’s mention of Tesla as an important artificial intelligence project highlights the intersection of technology and industry.
“You have robotics, energy storage and artificial intelligence coming together on autonomous taxi platforms and creating a whole new business model,” he said. In fact, Wood said he sold Nvidia stock to buy Tesla (and part of Coinbase) because he believes some AI stocks are overvalued, while Tesla has more upside potential.
Wood admits that he places more emphasis on software than hardware. He highlighted the fundamental shift, noting that future global spending on the software sector is likely to far exceed spending on hardware, with estimates of 10 to 20 times more being spent on software.
For those looking to emulate his investments, Wood shared his picks.
“Coinbase, Tesla, Roku, UiPath, Zoom, Block and CRISPR Therapeutics are the seven largest stocks in the portfolio,” he said. “The other three in the top ten are Roblox, Twilio and Unity Software.”
Wood’s final conclusion focused on the potential of artificial intelligence: “AI will continue to be the biggest catalyst for other types of innovation,” he said.
Edited by Ryan Ozawa.