Digital gold rush: Catherine Wood, Founder, CIO, and CEO at ARK Investment Management, LLC (aka “ARK” or “ARK Invest”), predicts a seismic shift in the financial landscape as Bitcoin and Ethereum emerge as the new safe havens.
On April 14, during episode 42 of ARK Invest’s “In the Know” podcast, Wood discussed the evolving role of Bitcoin and Ethereum in the global financial landscape. She highlighted how cryptocurrencies, previously considered volatile, are now being viewed as safe havens, disrupting traditional financial systems.
Wood emphasized that the perception of Bitcoin and Ethereum as flight-to-safety assets, similar to gold, signifies broader adoption and acceptance than initially anticipated. This development, she suggested, could be the tip of the iceberg for the transformative impact of cryptocurrencies on the world economy.
On March 23, in a conversation with Dr. Art Laffer, who is her mentor and former professor, Wood explained that Bitcoin is currently fulfilling the role of a store of value. She posited that if confidence in traditional global monetary systems were to decline, people might increasingly turn to cryptocurrencies like Bitcoin. With only two million more Bitcoin units left to be minted, this shift could cause the cryptocurrency’s price to soar.
The annual inflation rate for Bitcoin currently stands at 1.8%, representing the number of units being mined each year. This rate is set to halve in the coming years, eventually decreasing to less than 1% and continuing to drop until the maximum supply of 21 million units is reached. Wood underscored the significance of Bitcoin’s limited supply, pointing to the recent surge in its price from $19,000 to nearly $29,000 as evidence of people’s belief in its value.
Wood also expressed confidence in the developers, coders, and programmers who designed Bitcoin’s mathematical structure. She asserted that they are unlikely to alter it, further solidifying Bitcoin’s position as a store of value.