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Friday, June 21, 2024

Cathie Wood: Will gold be replaced by Bitcoin?

Institutional investors are switching from gold to Bitcoin. The trend will continue, according to Cathie Wood, CEO of Ark Invest.

In a recent revelation, Cathie Wood, CEO of Ark Invest, has voiced her belief in Bitcoin’s burgeoning role as a substitute for gold, citing its resilience and attractiveness as a store of value amid economic uncertainties.

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Wood articulated her stance during a February 4 interview on YouTube with Brett Winton, highlighting Bitcoin’s superior performance compared to gold and its increasing adoption by institutional investors. She underscored the significance of the BTC spot ETF, which offers institutional investors a seamless avenue to procure and custody Bitcoin assets.

Drawing parallels between Bitcoin and gold, Wood emphasized the cryptocurrency’s emergence as a reliable safe haven asset, particularly evident during the regional banking crisis of 2023, where Bitcoin surged by 40 percent.

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Echoing sentiments akin to Wood’s, Larry Fink, CEO of BlackRock, has also lauded Bitcoin’s qualities as a hedge against economic volatility, signaling a growing consensus within the financial industry.

The correlation between Bitcoin and gold has reached an all-time high, standing at 0.80 according to Longtermtrends, further bolstering the notion of Bitcoin’s increasing substitution for gold.

Ark Invest is among the ten providers offering a BTC spot ETF, a development eagerly anticipated at the start of the year but met with a “Sell the News” reaction, causing a temporary downturn in Bitcoin prices, as predicted by Wood.

Despite the market’s reaction, Ark Invest’s BTC Spot ETF holds a substantial $705 million in Bitcoin assets, although trailing behind competitors such as Grayscale, Fidelity, and BlackRock.

With a current market capitalization of approximately $780 billion, Bitcoin’s ascent as a viable store of value is challenging the dominance of gold, which boasts a market capitalization of around $14 trillion.

Amidst ongoing debates, some experts argue that Bitcoin offers superior characteristics as a store of value compared to gold, further fueling the narrative of Bitcoin’s growing prominence in the global financial landscape.

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