‘Sell Gold, Buy Bitcoin’: Cathie Wood Makes The Rotation Call

ARK Invest CEO Cathie Wood mentioned she would “make a shift from gold into Bitcoin” after gold’s run left the steel wanting prolonged on a key liquidity-adjusted measure, arguing that bitcoin’s provide dynamics and long-term adoption case nonetheless favor the crypto asset regardless of a sluggish 12 months.

Speaking on a Feb. 2 episode of The Rundown interview, Wood framed the decision as a part of a broader “nice acceleration” thesis specified by ARK’s newest “Big Ideas” report, which expects AI-driven capital expenditure to surge and spill into robotics, vitality storage, blockchain, and life sciences by what she described as converging S-curves.

Sell Gold, Buy Bitcoin Now?

Wood pushed again on the concept that bitcoin has “misplaced its mojo” as gold has outperformed lately, beginning with a statistical level. “First factor it’s best to know, Bitcoin and gold usually are not correlated. We did the evaluation […] the correlation […] is as near zero as you may get so no correlation,” she mentioned, including that within the final two market cycles, gold led bitcoin before the crypto asset caught up.

Her extra forceful warning was directed at gold’s positioning versus broad cash. “You’ll discover this […] a chart displaying gold divided by M2. It has solely been—it has by no means been larger. It hit a brand new all-time high this week,” Wood mentioned, arguing the setup resembles historic extremes that coincided with very totally different macro regimes. “Gold might be driving for a fall […] The final two occasions it was anyplace close to this was within the huge inflation […] within the 70s early 80s and […] the Great Depression.”

Wood mentioned the stablecoin increase has absorbed a few of bitcoin’s “rising markets” transaction narrative, however she characterised that as a payments-layer substitution fairly than a savings-layer substitute. “That’s only for the equal of a checking account. When they need actual financial savings, they’re going to purchase Bitcoin, we imagine,” she mentioned, tying the view to ARK’s long-term upside case. She referenced a bull-case target of $1.5 million by 2030 within the dialog, alongside the agency’s beforehand mentioned seven-figure framework.

Her core comparative declare in opposition to gold centered on issuance. “The provide development of Bitcoin is 0.8% per 12 months and it’ll drop to 0.4 in one other two years,” Wood mentioned, contrasting it with gold provide development she pegged at about 1% on common and suggesting mining output may run larger than bitcoin’s deterministic issuance charge. She additionally pointed to “intergenerational wealth switch” as a possible tailwind for bitcoin over time.

Wood additionally provided a extra tactical clarification for why bitcoin has struggled to maintain upside momentum, pointing to what she described as an October 10 “flash crash” tied to a software program glitch at Binance and an auto-deleveraging cascade. “There was a flash crash attributable to a software program glitch at Binance and there was an auto deleveraging occasion,” she mentioned. “People have been simply […] margin known as to the tune of about 28 billion {dollars} […] and we expect that’s simply now washing by the system.”

Because bitcoin is “essentially the most liquid of all crypto belongings,” Wood argued it turns into “the primary margin name,” making it the first supply of pressured promoting throughout broad deleveraging. She instructed that overhang is now fading, however her feedback got here earlier than Monday’s downdraft that noticed bitcoin slide to $74,600. In the interview, she mentioned the market was “testing […] round 80,000 once more” and anticipated it to “maintain within the 80 to 90,000 vary” absent a serious geopolitical shock. “Unless all hell breaks free in Iran […] then perhaps we’ll see the shop of worth come again for Bitcoin,” she added.

At press time, BTC traded at $78,377.