Cathie Wood, founder and CEO of investment management company ARK Invest, reiterated her bullishness on Bitcoin and other cryptocurrencies in a recent talk at Lyceum Miami with journalist and investor Anthony Pompliano.
Wood provided some insights into her investment strategy and outlook for the industry — despite some recent setbacks to the broader crypto macro — like the collapse of both FTX and Silvergate, Wood says she remains bullish.
“Our conviction actually has grown through this year. Grown through this past year, because FTX, Celsius, Three AC, Voyager, all of these were centralized. Opaque institutions, they went bust. And even the centralized regulated institutions, now we’re looking at Genesis, probably bankruptcy. Yes, Silvergate, these are regulated, but again, they’re much more centralized and opaque.”
One key point Wood added is that she believes Bitcoin is a hedge against inflation and that it has the potential to play a role in diversifying institutional portfolios.
When considering Bitcoin as a new asset class, Wood also said it is important to recognize that it shares similarities with the evolution of the derivatives market. Like derivatives, Bitcoin is a relatively new financial instrument that has been met with regulatory challenges and uncertainty, “I think that’s where we’re going with this new asset class […]securities,” she mentioned.
“Coinbase clearly is a security, and it has on top of it, assets that could be a new asset class. So I think we’re iterating, it’s been very messy. Even this concept of staking,” Wood said.
Read more: Cathie Wood’s ARK starts off 2023 with a $5.7M Coinbase stock purchase
In addition, Wood discussed some of the risks associated with cryptocurrency investments, including regulatory risks and the potential for technological disruption to existing industries. She also emphasized the importance of doing thorough research and due diligence before investing in any cryptocurrency-related assets.
“In the last 18 months, our strategies were very much out of favor. They are coming back into favor because of fears of inflation and interest rates. When we move into a risk off period, plus the time horizons, investor time horizon shrink.”
Wood’s ARK Invest was one of the first traditional Wall Street asset management firms to start buying Bitcoin in 2015. Wood credits an unwavering sense of being bold and following her research and data as a motivating factor for what helps her persevere in bear markets.
“Much like in the crypto world, what gave us the courage of our conviction and basically shielded us from the critics in some way was our research and the breakthroughs that were happening faster, not slower, faster. When times are tough, innovation actually gains more traction. Faster, better, cheaper, more creative, more productive.”
The full hour-long conversation between Wood and Pompliano can be seen on YouTube.
