Cathie Wood Says Investors Are Ditching Gold For Bitcoin

Andrew Throuvalas
Last updated: | 2 min read
Bitcoin gold
Source: Bloomberg

Ark Invest CEO Cathie Wood believes Bitcoin (BTC) is beginning to replace gold on the investment stage as the precious metal loses popularity over time.

In a video presentation published by Ark on Sunday, Wood demonstrated how commodities at large have failed to provide a reliable hedge against inflation over a multi-decade period.

“Today, we are where we were in the early 80s,” said Wood in reference to the Bloomberg Commodity Index. “This is not adjusted for inflation – you can only imagine how low these commodity prices would be.”

Bitcoin VS Gold: A Historical Look

In January 1981, gold traded for $555 per ounce, meaning it fared better than other commodities over the next several decades. Its growth has been relatively limited since reaching $1,800 in 2011, however, now trading for $2030, 13 years later.

During that time, Bitcoin (BTC) rose from $1 in 2011 to $43,000 today, trouncing gold’s performance across almost all timeframes. Thanks to its decentralized nature and limited supply, Wood noted that Bitcoin is often referred to as digital gold.

“Bitcoin shot up 40% as the KRE – the regional bank index – was imploding,” Wood noted, referring to the U.S. banking crisis in March 2023 involving many crypto-adjacent banks. Gold also rose at the time, but not to the same degree.

Bitcoin’s Reaction to ETFs

Though Bitcoin experienced a brief decline next to gold after the launch of several U.S. spot ETFs last month, the asset’s price has since returned to pre-launch levels. Gold itself had a slow start when its first ETF launched in 2004, before embarking on an eight-year bull run from $400 to $1,800.

According to Wood, Bitcoin only declined after the ETFs were introduced because it was a “sell the news event” – when speculators buy an asset preceding an expected positive event, then take profits after it actually happens.

About 15 million BTC out of 19.5 million in circulation are still in “strong hands” – meaning they haven’t moved on the blockchain within 155 days.

“This idea that [Bitcoin] is a flight to safety, or a flight to quality, is reasserting itself here,” said Wood. “There’s now a substitution into Bitcoin, and we think that is going to continue now that there is a much easier way, less friction-filled way, to access Bitcoin.”

Ark Invest was one of nine asset managers to launch a new Bitcoin spot ETF on January 11.

The ARK 21Shares Bitcoin ETF (ARKB) experienced its very first day of zero net inflows on Monday but absorbed another $8.6 million on Tuesday. To date, it now holds $717 million worth of BTC.