Cathie Wood Bets On Bitcoin As The Strong Hedge Against Deflation

Key Points:

• Cathie Wood bets on Bitcoin as a hedge against potential deflation and prefers it over gold or cash for a 10-year hold.
• Despite Bitcoin’s significant drop in 2022, its value has more than doubled this year, and it’s seen as a potential hedge against inflation.

The head of ARK Investment Management, Cathie Wood bets on Bitcoin that it will serve as a hedge against potential deflation in the coming decade, as per BBG.

She expects an era of falling prices driven by emerging technologies like artificial intelligence, electric vehicles, robotics, genomic sequencing, and blockchain. Wood has held this deflationary perspective since 2021, despite current market fears of increased inflation.

When asked on Bloomberg’s Merryn Talks Money podcast about her preferred asset class to hold for 10 years, Wood unambiguously chose Bitcoin over gold or cash. She views Bitcoin as a safeguard against both inflation and deflation due to its lack of counterparty risk and limited involvement of institutions. She referred to it as “digital gold”.

Cathie Wood Bets On Bitcoin

Wood has consistently been a strong proponent of cryptocurrency, anticipating that it would benefit from broader technological growth and innovation. She once predicted that Bitcoin’s value would exceed $1 million in the next decade.

Despite a significant drop in 2022, Bitcoin’s value has more than doubled this year. Market participants consider it a potential inflation hedge, despite its failure to act as one during the largest consumer-price surge since the early 1980s. Recently, the cryptocurrency has seen a surge due to expectations that the US Securities and Exchange Commission may approve Bitcoin-focused ETFs.

ARK Investment Management, under Wood’s leadership, has applied for a Bitcoin ETF in collaboration with 21Shares and has invested in the Grayscale Bitcoin Trust. Wood anticipates a convergence between AI and Bitcoin, which she believes will revolutionize the global division of labor in unexpected ways.

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