Cathie Wood of Ark Invest Sees More Institutional Investors Entering Bitcoin Market Amid Bank Crisis – Here’s What You Need to Know
Ark Invest CEO Cathie Wood believes Bitcoin’s rally amid the recent banking crisis will only “attract more institutions.”
In a recent interview with Bloomberg, Wood said Bitcoin’s price behavior through the crisis “is going to attract more institutions.”
She claimed this could help build a bull case for the flagship cryptocurrency to surge to around $500,000, adding that during a banking crisis, liquidity dries out, which usually hurts assets.
“The fact that Bitcoin moved in a very different way from the equity markets, in particular, was quite instructive,” she added.
Corporate treasuries had previously been pulling away from having bitcoin in their balance sheets because regulators themselves were pushing them to divest, she said.
ARK Investment Management CEO Cathie Wood says the behavior of the Bitcoin's price through the latest banking turmoil will attract more institutions and investors https://t.co/2d8cT7SX3n pic.twitter.com/Eaymh05lhq
— Bloomberg Crypto (@crypto) March 21, 2023
Bitcoin is up by more than 27% over the past two weeks, according to data by CoinGecko. This is despite the recent turbulence in the US banking sector that saw three major banks collapse in one week.
In a note to investors, Ark Invest argued that the rally is a sign of Bitcoin’s value as a safe haven asset. Ark Invest’s Yassine Elmandjra wrote in the firm’s weekly newsletter:
“In the face of the U.S. and European banking crises, bitcoin’s price appreciation suggests that lax regulatory oversight had no impact on the decentralized, transparent, and auditable crypto asset ecosystem.”
“Last weekend, when many banks were closed, and others were facing bank runs, bitcoin didn’t skip a beat: it settled ~$33 billion, facilitated ~600k transactions, issued 2,037 new BTC at a steady and predictable ~1.8% inflation rate, attracted ~1 million new addresses, and generated $43 million for miners securing the network,” Elmandjra added.
Ark Invest Remains Bullish on Crypto
Ark Invest has been bullish on crypto despite the recent crypto meltdown and increasing regulatory scrutiny.
Just recently, the company raised more than $16 million for two new private crypto funds.
The investment management firm has also been interested in shares of major US-based cryptocurrency exchange Coinbase.
Last week, Cathie Wood added 301,437 shares of Coinbase to its ARK Innovation ETF (ARKK) and 52,525 shares to its Next Generation Internet ETF (ARKW).
The move came after the fund had purchased 333,637 shares in January. With this latest purchase, Ark owns 9.9 million Coinbase shares or around 3.8% of the company’s stocks.
Wood’s infamous prediction that Bitcoin would hit $500,000 by 2030 has also been a major talking point during the recent meltdown.
Earlier this year, she reiterated that she expects Bitcoin to hit $500,000. “Yes, we’re a little higher than that in our bearish case for 2030,” she said, noting that her bullish case is much higher.
During the recent interview, Wood explained that this price target was made on the back of an institutional investor BTC allocation analysis, which estimates most firms would allocate between 2.5% to 6.5% to BTC in their investment portfolios.
“These are the sorts of allocations that they would have made to emerging, new categories of assets like real estate in the 70s and small caps in the 80s and 90s,” Wood added.
