Cathie Wood is an influential fund manager, CEO, and chief investment officer of Ark Invest. She is well known for being a very vocal supporter of the cryptocurrency movement and slammed Elon Musk and the “ESG movement” for the recent drop in cryptocurrency prices that also paused a lot of institutional buying that was going on.
In her speech during that Consensus 2021 conference, Cathie Wood stated that Bitcoin is impossible to shut down and BTC is “already on its way.” She believes that no one can make bitcoin or cryptocurrencies go away and regulators will come to terms with this fact soon.
She also expects regulators to become a little friendlier to the largest digital currency as they will be afraid to miss out on innovations provided by the underlying technologies that are been used by cryptocurrencies.
After reaching a new historic peak at the $64,800 level in mid-April, Bitcoin has blown out to below the $40,000 line thanks to FUD by Chinese authorities and Elon Musk and their fears related to excessive CO2 emissions.
Various FUD by Chinese authorities on banning financial institution in dealing with cryptocurrency transactions followed by a hunt over the bitcoin mining market in China and Elon Musk’s energy and CO2 concerns created so much panic in the market that after reaching a new historic peak at the $64,800 level in mid-April, Bitcoin has declined below the $40,000 line.
And the recent criticism is coming from the governor of the Bank of Japan, Haruhiko Kuroda who is questioning Bitcoin’s use case and fears that crypto trading is speculative and extraordinarily volatile. Well, that’s not new. On the other hand, the bank is currently testing a ‘digital yen,’ the digital version of its fiat currency, but remains shaky on the topic of cryptocurrencies. This FUD had caused bitcoin to plunge from the $38,000 level to $35,817 at press time.
Top cryptocurrency is far too volatile, isn’t used as a settlement layer, and is backed by nothing.Haruhiko Kuroda, governor, The Bank of Japan
But Cathie on the other hand believes in bitcoin and considers it the reserve currency of the digital ecosystem and said it was the crypto equivalent of the dollar. The ARK chief also pointed to the increasing institutional embrace for Bitcoin and said that if institutions were to allocate around 5% of their funds to Bitcoin the way they have with other asset classes like real estate, gold, or emerging markets, that would lift the price to $400,000 or $500,000.
And at those levels, Bitcoin would be worth roughly the same as all of the gold in the world. That fits with another argument for Bitcoin’s value, as many backers claim it’s digital gold due to it being capped at 21 million coins, which creates artificial scarcity.
Cathie’s bullish stance shouldn’t be ignored as she has been right so far about several other disruptive innovations, and her funds have been aggressively gaining exposure to Bitcoin through purchases of the Grayscale Bitcoin Trust and Coinbase. However, Bitcoin’s recent volatility shows the asset still remains highly speculative and confidence in its long-term growth is fickle, but if it does become the digital reserve currency as Cathie argued, it could hit her price target given a long enough time frame.