ARK Invest’s Cathie Wood Shifts Focus from Gold to Bitcoin

Cathie Wood, the CEO of ARK Invest, recently expressed her intention to transition her investments from gold to Bitcoin. This decision comes on the heels of a notable rise in gold prices, which has expanded the gold market based on a key liquidity-adjusted metric. Despite a challenging year for Bitcoin, Wood believes that its supply dynamics and potential for long-term adoption continue to favor the cryptocurrency.

In a February 2 interview with The Rundown, Wood presented her argument as part of a larger discussion about a significant “big acceleration” outlined in ARK’s latest “Big Ideas” report. The report forecasts a substantial increase in AI-driven capital spending, projecting ripple effects into sectors like robotics, energy storage, blockchain, and life sciences—what she refers to as a converging S-curve.

Should I sell gold and buy Bitcoin now?

From a statistical standpoint, Wood dismissed claims that Bitcoin has “lost its mojo” due to gold’s better performance in recent years. “To start with, there’s no correlation between Bitcoin and gold. We’ve analyzed this, and the result is clear—it’s essentially zero,” she explained. Moreover, she noted that during the last two market cycles, gold had initially outperformed before Bitcoin eventually caught up.

Wood also expressed concern about gold’s position in relation to broad money. “If you look at a graph of gold compared to M2, it has reached unprecedented highs this week,” she remarked, suggesting that current conditions resemble historical extremes that often led to significant inflation, like those seen in the 70s, early 80s, and the Great Depression.

While acknowledging the stablecoin buzz, Wood described it as a mere replacement for payment layers rather than something that could supplant Bitcoin as a store of value. “It’s like using a checking account. When it’s time for real savings, people will likely choose Bitcoin,” she said. This outlook aligns with ARK’s optimistic projection of Bitcoin hitting $1.5 million by 2030, which is in addition to other forecasts suggesting it could reach seven figures.

Wood’s fundamental argument against gold revolves around supply issuance. “Bitcoin’s supply growth is set at 0.8% per year and will drop to 0.4% in two years,” she noted, comparing this to gold’s expected average growth of about 1%, hinting that gold mining could outstrip Bitcoin’s predefined issuance over time. She also mentioned “intergenerational wealth transfers” as a favorable factor for Bitcoin’s growth in the long run.

On a more tactical note, Wood offered insights into Bitcoin’s challenges in maintaining upward momentum, referencing the October 10 “flash crash” linked to a software glitch at Binance that spurred an automatic deleveraging event. “That glitch caused substantial margin calls—around $28 billion—now working its way through the system,” she explained.

Wood indicated that since Bitcoin is “the most liquid of all crypto assets,” it’s likely to be the first to face margin calls and forced sales during widespread deleveraging. While she suggested that this pressure was beginning to ease, her comments preceded a Monday downturn that saw Bitcoin drop to $74,600. She commented on market fluctuations, saying, “We’re in a testing phase. I expect the number to bounce back to around 80,000,” predicting stability within the $80,000 to $90,000 range unless major geopolitical events intervene. “After that, Bitcoin’s value as a store of wealth will likely re-emerge,” she added.

As of now, Bitcoin was priced at $78,377.