IMPORTANT POINTS:
- Bitcoin is set to grow enormously as a store of value following the recent banking collapses.
- Cathie Wood sees three revolutions underway in the wake of cryptocurrencies: the Bitcoin money revolution, the Ethereum-based DeFi revolution, and the digital property rights revolution.
- Wood believes that Coinbase will win its legal battle with the SEC and will be rewarded for its resilience in the US market.
ARK Invest CEO and cryptocurrency advocate, Cathie Wood, argues that Bitcoin is destined to grow enormously as a store of value following the recent banking collapses. Wood strongly believes that the stability of Bitcoin and its breakthrough in response to the collapse of regional banks in the US demonstrate that Bitcoin is the future of money.
Bitcoin, the light in the financial storm
In a recent interview with Barron’s, Wood reaffirmed his optimism towards digital assets, highlighting three reasons why he does not plan to divest. According to her, Bitcoin proved its resilience and grew by 60%, from USD 19,000 to USD 30,000, when regional banks such as First Republic, SVB and Signature Bank collapsed. She attributed this rise to the fact that investors perceive cryptocurrency as a safe alternative to store their wealth.
“We are witnessing three revolutions in the wake of crypto. Bitcoin will be the protagonist of the first, the money revolution. The biggest indication is that when shares of regional banks began to plummet earlier this year, Bitcoin went from $19,000 to $30,000. That was a safe haven, and we expect it to pick up speed. The centralized monetary system we have today is an aberration. We could be going back to the future, before the Federal Reserve existed, under a rules-based, digital money system with no government oversight.”
The DeFi revolution and digital ownership
The other reasons for his optimism towards digital assets relate to decentralized finance (DeFi) and digital property rights that involve the tokenization of various physical assets in real estate and other relevant industries. Wood stated:
“The second revolution is in financial services, or what is known as DeFi, which will be based on Ethereum. There are numerous infrastructure providers. It’s survival of the fittest, and I’m excited to see who wins.”
Last but not least, in the third revolution:
“There are digital property rights, or what many call NFTs or the metaverse. People are already buying real estate in virtual worlds. Our young researchers come to the office wearing jeans and t-shirts without logos, but they are earning their status in the virtual world.”
Wood and the Coinbase case against the SEC
During the interview, Cathie Wood also commented on Coinbase’s ongoing battle with the United States Securities and Exchange Commission (SEC). Wood’s ARK holdings are one of the largest holders of Coinbase shares. She believes the cryptocurrency exchange will ultimately achieve victory in the SEC’s lawsuit against it for selling unregistered securities.
In his vision, the court will rule that the SEC has exceeded its regulatory purview, and in the long run, the US Congress will pass cryptocurrency-friendly legislation.
“Meanwhile, the legislative branch has woken up to the fact that cryptocurrencies are a new asset class and that we may need new legislation to provide guidance to regulators.
Those two branches of government have given us a lot of confidence that Coinbase will come out of this a winner. Many Coinbase competitors have either not entered the US or have left due to our regulatory system. Coinbase has been left to fight. We believe they will be rewarded accordingly.”
ARK Invest had bought $21.6 million worth of Coinbase shares in early June, just after the SEC filed a lawsuit against the cryptocurrency exchange.
