Cathie Wood, the founder and CEO of ARK Investment Management, said she believes one Bitcoin could be worth $1 million someday—just not someday soon.
Wood weighed in on a variety of topics, from interest rates to the burgeoning realm of artificial intelligence (AI), and in a recent interview with the Brazilian financial news portal Infomoney, she said she was as bullish about Bitcoin as ever.
"Gold is a trillion-dollar asset out there, and we do believe that Bitcoin will get a nice slug of that," she said, explaining how BTC could reach $1 million per coin. The comparison is not just about value, Wood said, but about the fundamental role Bitcoin could play as a decentralized, private alternative to traditional currencies.
Wood said she also sees Bitcoin playing a crucial role in emerging markets as a hedge against unstable monetary and fiscal policies for individuals and institutions.
"Most emerging markets are going to use something like Bitcoin as an insurance policy," she elaborated, pointing out the broad spectrum of Bitcoin's applicability.
According to Wood, Bitcoin represents a new era in finance —the first global, digital, and decentralized monetary system. This is a groundbreaking development, particularly in light of the closure of the U.S. gold window in 1971. Her conclusions, she said, are based on Bitcoin's scarcity, security, and growing acceptance within the investment community.
“So the scarcity value as institutions push in is going to increase the price—we think fairly dramatically,” she said, adding that te road to the million-dollar token just requires a little more trust. “Right now, we're in the 40,000 to $43,000 range. It won't take much [with] institutions putting 2% to 5% of [Bitcoin] in their asset allocation, we'll get it there easily.”
With widespread adoption, which she thinks can be achieved if institutions incorporate a bit of BTC into their portfolios directly or via ETFs, the reputation of Bitcoin as a risky investment would fade as its positive characteristics deliver benefits.
If cryptocurrencies prove to be a new asset class, it would reduce its correlation with other alternative assets, which could increase their appeal among investors, Wood said.
“Institutions know that if there is a new asset class, the correlation of returns with other asset classes is going to below and what that typically means is the return per unit of risk when you incorporate Bitcoin into your portfolios will go up—and institutional investors know they cannot miss those sorts of opportunities,” she said.
Cathie’s Views on AI
The conversation with Wood soon pivoted to AI and its profound impact on productivity and innovation. She expressed strong confidence in AI's ongoing growth and significance, emphasizing the rapid advancements in this field. In particular, Wood's mention of Tesla as a significant AI project spotlights the intersection of technology and industry.
“You've got robotics, energy storage, and artificial intelligence converging into autonomous taxi platforms and creating a completely new business model,” she said. In fact, Wood said that she sold Nvidia stocks to buy Tesla (and some Coinbase) because she believes some AI stocks are overvalued while Tesla has an ever greater potential to increase in value.
Wood admits she places greater emphasis on software than hardware. She highlighted a pivotal shift, noting that future global expenditures in the software sector will likely dwarf those in hardware, with an estimated ratio of 10 to 20 times more spent on software.
For those who want to mimic her investments, Wood shared her picks.
“Coinbase, Tesla, Roku UiPath, Zoom, Block and CRISPR therapeutics are the top seven stocks in the portfolio,” she revealed. “The other three in the top 10 are Roblox, Twilio, and Unity software.”
Wood's closing insight returned to the potential of AI: ”Artificial intelligence will remain the biggest catalyst to other kinds of innovation,” she said.
Edited by Ryan Ozawa.