ARK Invest’s Cathie Wood says institutions will flock to Bitcoin (BTC) amid US banking crisis
ARK Invest CEO Cathie Wood says the US banking woes will prompt institutions to invest in Bitcoin (BTC) to diversify their portfolios.
In a new interview with Bloomberg, Wood says Bitcoin’s strong performance as US banks failed will encourage wider adoption of cryptoassets.
“Part of what happens in a crisis is that liquidity dries up so it tends to hurt assets. And the fact that Bitcoin moved in a very different way than the stock markets, in particular, was quite instructive.
Wood says she remains confident in ARK’s forecast for Bitcoin’s price, which is more than $680,000 by the year 2030.
“You find the building blocks for these [Bitcoin] price targets in our ARK Big Ideas 2023. And they are, for the base case, I would suggest quite conservative. We’ve knocked some of them down since last year. I know that corporate taxes pulled away from Bitcoin because the regulators pulled them away from Bitcoin on their balance sheets. So we have retreated there. But we believe that the price’s behavior throughout this crisis will attract more institutions, for example.”
She predicts that institutions will diversify their portfolios with Bitcoin in the same way they did with other asset classes during previous decades.
“We have created a report aimed at institutional investors and the allocation they should make if they care about this new asset class and diversify their portfolios. I think it’s somewhere between 2.5% and 6.5%. So not crazy. These are the kinds of allocations they would have made to new asset classes like real estate in the 70s, emerging markets and small cap in the 80s and 90s.”
Wood recently predicted that once the Federal Reserve swings, a booming economy reminiscent of the “Roaring Twenties” is likely to follow with innovative technologies like blockchain coming out going forward.
Bitcoin is worth $27,272 at the time of writing.
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