Cathie Wood remains bullish on Bitcoin and other cryptocurrencies

Cathie Wood, founder and CEO of investment management firm ARK Invest, reiterated her bullishness on Bitcoin and other cryptocurrencies in a recent conversation at Lyceum Miami with journalist and investor Anthony Pompliano.

Giving some insight into her investment strategy and the outlook for the industry – despite some recent setbacks to the broader crypto macro – such as the collapse of both FTX and Silvergate, Wood says she remains bullish.

“Our conviction has actually grown throughout this year. Grown over the last year, because FTX, Celsius, Three AC, Voyager, all of these were centralized. Opaque institutions, they broke. And even the centralized regulated institutions, now we’re looking at Genesis, probably bankrupt. Yes, Silvergate, these are regulated, but again, they are much more centralized and opaque.”

An important point Wood added is that she believes Bitcoin is a hedge against inflation and that it has the potential to play a role in diversifying institutional portfolios.

When considering Bitcoin as a new asset class, Wood also said it’s important to recognize that it shares similarities with the evolution of the derivatives market. Like derivatives, Bitcoin is a relatively new financial instrument that has been met with regulatory challenges and uncertainty, “I think that’s where we’re going with this new asset class […]securities,” she said.

“Coinbase is clearly a security, and it has assets on top of it that could be a new asset class. So I think we’re iterating, it’s been very messy. Even this concept of staking,” Wood said.

Read more: Cathie Wood’s ARK kicks off 2023 with a $5.7M Coinbase stock purchase

In addition, Wood discussed some of the risks associated with investing in cryptocurrency, including regulatory risks and the potential for technological disruption of existing industries. She also stressed the importance of doing thorough research and due diligence before investing in cryptocurrency-related assets.

“Over the last 18 months, our strategies have been very poor. They’re coming back in favor because of fear of inflation and interest rates. As we enter a risk-free period, plus time horizons, investors’ time horizons are shrinking.”

Wood’s ARK Invest was one of the first traditional Wall Street asset management firms to start buying Bitcoin in 2015. Wood credits an unwavering sense of being bold and following her research and data as a motivating factor in what helps her persevere in bear markets .

“Just like in the crypto world, what gave us the courage of our convictions and basically shielded us from the critics somehow, was our research and the breakthroughs that happened faster, not slower, faster. When times are tough, innovation actually gets more drag help. Faster, better, cheaper, more creative, more productive.”

The entire hour-long conversation between Wood and Pompliano can be seen on YouTube.