Cathie Wood: Bitcoin Acts as Hedge Against Poor Government Fiscal Policy

Cathie Wood, CEO of ARK Invest, suggests that Bitcoin’s meteoric rise in price this year is not solely attributed to the introduction of Bitcoin ETFs. Instead, Wood argues that Bitcoin is gaining traction as a “flight to safety” amidst concerns about depreciating fiat currencies.

In an interview with CNBC shared on April 3, Wood emphasized that Bitcoin serves as both a risk-on and risk-off investment. She highlighted the significance of fiat currency devaluation as a driving force behind Bitcoin’s price surge.

While the launch of exchange-traded funds has garnered attention, Wood believes that the broader global economic landscape is playing a pivotal role. She pointed to instances of currency devaluations, such as those observed with the Nigerian naira and Egyptian pound, which have lost considerable value against the U.S. dollar due to deliberate government interventions rather than market forces.

Wood characterizes Bitcoin as a hedge against devaluation and loss of purchasing power, positioning it as an insurance policy against unfavorable fiscal and monetary policies adopted by governments. She draws parallels with previous financial crises, such as the U.S. regional banking crisis in 2023 and the Greek financial crisis in 2013, to underscore Bitcoin’s role as a safeguard against adverse economic conditions.

While ARK’s ETF product competes with major asset managers, recent data showed uncharacteristic net outflows of nearly $90 million. Wood attributes this to quarterly rebalancing flows and remains optimistic about Bitcoin’s long-term prospects, predicting a $1 million price target by 2030 fueled by institutional adoption.

Despite the fluctuations in fund flows, Wood maintains her bullish stance on Bitcoin, emphasizing its value proposition as a hedge against government fiscal policies and currency devaluation.

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