“Impossible” to Shut Crypto Down: Ark Invest’s Cathie Wood Sees Emerging Market Central Banks Accumulating Bitcoin

She expects regulators to be “more friendly over time” while expanding her focus to include Ethereum and expects central banks to do that with BTC and other currencies.


Cathie Wood of Ark Investment shrugged any worries of harsher regulations as the cryptocurrency is “already on its way, and it’ll be impossible to shut it down.”

In fact, regulators “will be a little more friendly over time” toward cryptocurrencies out of fear of missing out (FOMO) on the innovation provided by the sector, Wood said at the Consensus 2021 conference organized by CoinDesk.

Talking about the environmental concerns, Wood said, “Half of the solution is understanding the problem.”

“This auditing of what miners, certainly in North America, are willing to do around how much of their electricity usage is generated by renewables is going to bring that topic into stark relief, and will encourage an acceleration in the adoption of renewables beyond which otherwise would have taken the place.”

This could also make the solar industry more attractive, she said. Ark doesn’t invest in solar stocks because it isn’t clear if the industry could be profitable in the next five years without subsidies, but “this dynamic might change that. So I’m actually quite excited about it,” Wood added.

Ark Investment Management published a report last month saying Bitcoin mining can drive investment in solar power and make more renewable energy available to the grid.

Expanding the Focus

During the recent sell-off that sent BTC prices crashing just over 53%, as we reported, a record amount of outflows from bitcoin funds were recorded, though it was only 0.2% of the assets under management.

Wood said the focus on green factors likely led to a pause in institutional buying of Bitcoin.

A crypto bull, Wood recently said that she is confident of her Bitcoin price prediction of $500,000.

As we reported, Ark is moving beyond Bitcoin; in the quarter of 2021, Ark bought Grayscale Ethereum Trust (ETHE) shares as well as the second-largest cryptocurrency gaining traction. She is already heavily invested in Coinabase’s COIN shares.

Ark has now hired an Ether miner on its analyst team as part of an expanding focus on cryptocurrencies, said Wood while predicting that deflation will push the value of bitcoin up by putting pressure on the currencies of emerging market countries that are commodity-dependent.

“I wouldn’t be surprised if some of these emerging market central banks start accumulating Bitcoin and other currencies because if they know their currencies are going down … they will be under attack as reserves go down.”

As for the stock market woes, concerns about higher US capital gain taxes are hurting “high-volatility, high-multiple stocks,” she said.

Wood, whose Ark Innovation ETF was the best-performing US equity fund in 2020 for her outsized bets on stocks that thrived during the pandemic, has her flagship fund down nearly 30% from its peak in early February.

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