ARK Invest’s Cathie Wood ‘not surprised’ by the decline in the crypto market
Cathie Wood, founder and CEO of ARK Invest, said more regional banks could fail if the ongoing banking crisis in the US is not resolved.
Wood looked back at the factors that led to the closure of Silicon Valley Bank and Silvergate over the weekend, noting that it was the Federal Reserve’s responsibility to address the issue. She warned that focusing on lagging indicators like the CPI could steer the Fed away from the root cause of the problem – deflation in the economy caused by the inverted yield curve.
Having more regional banks fail would further centralize the banking system in the United States, she said, adding that the nationalization of the banking system is also a likely risk.
The failure of three major crypto- and tech-focused banks further cemented Wood’s optimism when it comes to crypto.
She so that neither she nor the rest of the team overseeing crypto investments at ARK have been surprised by the current downturn in the crypto market.
The market suffered a blow earlier this week when rumors of Silvergate’s potential insolvency shook investor confidence. After falling below $20,000 and dragging the rest of the market with it, Bitcoin regained $22,000 when news of Signature bank broke late Sunday night. Ethereum and the rest of the altcoin market followed suit, producing uncharacteristic returns in the wake of unprecedented market turmoil.
Wood believes Bitcoin and Ethereum rebounded because the blockchain networks they are based on are decentralized, transparent and auditable.
“Banks are not, and in recent days they have become less so,” she said. “Regulators have focused investors on the threat crypto poses to users, but this weekend the theory turned upside down.”
Cathie Wood’s confidence in the crypto market is also not a surprise.
Wood stood by his investments throughout 2022, even after suffering significant losses on the majority of ARK’s crypto portfolio. The fund’s commitment to the industry appears to have been recognized by investors, who increased their investments in ARK’s ETF even as its risky technology portfolio crumbled.
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