Bitcoin is Favored Over Gold and Cash by Ark Investment Management’s CEO Cathie Wood, Predicts An Economic Downturn
Cathie Wood, the chief executive officer and originator of Ark Investment Management highlights her bullish stance on Bitcoin’s prospects, she disclosed her fervor in a recent podcast, “Merryn Talks Money” hosted by Bloomberg. Answering the posed question about the best decade-long investment between gold, cash, or Bitcoin, Wood confidently chose Bitcoin, citing it as her top choice “without a doubt.”
Bitcoin Surpassing Gold as Deflation impacts the U.S. Economy: A Divergent Wager by Ark Invest’s CEO
Last week, Cathie Wood, the mastermind behind Ark Invest, backed Bitcoin (BTC) over conventional assets such as gold and fiat money. Her bullish view on Bitcoin was revealed during her interview on Bloomberg’s podcast, “Merryn Talks Money”. When asked on which asset she’d choose to retain for a decade, Wood’s pick was clear, “Without a doubt, Bitcoin. Bitcoin is a safeguard against both inflation and deflation—similar to gold—but Bitcoin embodies the digital era… gold’s demand is already established, but Bitcoin is the new entrant.”
Wood, a staunch advocate of Bitcoin’s potential, sketched a forecast in September 2021, just as Bitcoin was ascending towards its highest value of $69,000, that it could reach a mind-boggling $500,000 within a span of five years. She also intrigued the audience with her foresight of the metaverse, projecting it to explode into a multi-trillion-dollar sector the same year. In the podcast chat, Wood highlighted the early stage of institutional investment in BTC and the generational shift in asset choices, commenting:
Institutions have barely dipped their toes in and the young generation prefers to hold Bitcoin than gold.
Her team at Ark Invest expects a significant deflationary event in the future for the US economy, loaded with uncertainties. Wood stuck to her argument, insisting that “deflation” is expecting in the economy’s future and there’s already preliminary evidence of such deflation. “The current time is more reminiscent of the 19-teens than the 1970s,” Wood stated on the podcast. Wood’s perspective of Bitcoin acquiring predominantly as an inflation hedge contradicts the conventional belief.
“I disagree that the rise of Bitcoin is due to inflation fear. Bitcoin does not involve counterparty risk because it is a fully transparent, decentralized network. You can monitor everything happening on the network, unlike the regional banks which only provide assumptive information as they experience deposit loss and have to fund the loss by selling off securities,” said Ark Invest’s CEO. In addition to Bitcoin (BTC), the conversation also touched on the subjects of artificial intelligence (AI) and her thoughts on Tesla.
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Frequently asked Questions
1. Why does Cathie Wood favor Bitcoin over gold and cash?
Answer: Cathie Wood favors Bitcoin over gold and cash because she believes that Bitcoin is a better store of value and hedge against inflation in the current economic landscape.
2. What is the rationale behind Cathie Wood’s prediction for a deflationary economy ahead?
Answer: Cathie Wood predicts a deflationary economy ahead due to the increasing adoption of disruptive technologies and the potential for decreased global demand, leading to lower prices for goods and services.
3. How does Cathie Wood view Bitcoin as a hedge against deflation?
Answer: Cathie Wood views Bitcoin as a hedge against deflation because its limited supply and decentralized nature make it resistant to the traditional monetary policies that could lead to deflationary pressures.
4. In what ways does Cathie Wood perceive Bitcoin as superior to gold as an investment?
Answer: Cathie Wood perceives Bitcoin as superior to gold as an investment because it has the potential for higher returns, is easily divisible, and offers more liquidity compared to gold.
5. What are the potential risks associated with Cathie Wood’s preference for Bitcoin over cash?
Answer: The potential risks associated with Cathie Wood’s preference for Bitcoin over cash include the volatility of the cryptocurrency market, regulatory uncertainties, and the potential for hacking or security breaches.
6. How does Cathie Wood’s stance on Bitcoin align with her overall investment philosophy?
Answer: Cathie Wood’s stance on Bitcoin aligns with her overall investment philosophy, which focuses on disruptive technologies and long-term growth potential. She believes that Bitcoin fits this philosophy due to its potential for innovation and adoption.
7. What are the potential benefits for investors in a deflationary economy, according to Cathie Wood?
Answer: According to Cathie Wood, potential benefits for investors in a deflationary economy include increased purchasing power, the potential for higher real returns on investments, and the opportunity to invest in innovative companies that thrive in a deflationary environment.
