Cathie Wood Says ‘Digital Gold’ Bitcoin Is Better Deflation Hedge Than Gold Or Cash

Updated: 03 November 2023

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ARK Investment Management‘s Cathie Wood says Bitcoin (BTC) is a better deflation hedge than gold or cash, Bloomberg reported.

“Bitcoin is a hedge against both inflation and deflation because there’s no counterparty risk, and institutions are barely involved,” said Wood, speaking on Bloomberg’s “Merryn Talks Money“ podcast. “It’s digital gold,”

Wood expects a deflationary phase in coming years as new technologies including artificial intelligence, robotics and blockchain help generate greater efficiencies that bring prices down, a theory she’s promoted for a couple of years even as markets worry about rising inflation.

BTC To Benefit From AI, Cathie Wood Says

Wood has been an active advocate for BTC since 2021 and believes that the leading cryptocurrency will benefit from the wider growth in new technologies such as artificial intelligence (AI), electric vehicles, robotics, genomic sequencing and blockchain technology.

On the podcast, Wood revealed that she anticipates a convergence between AI and Bitcoin that will “enable micro tasks globally and a division of labor in a way we can’t even imagine now.”

Cathie Wood Makes Bold Prediction

Despite BTC failing to act as a hedge against one of the biggest consumer-price surges since the early 1980s, Wood remained optimistic towards BTC’s long-term prospects. This was after she went as far as to predict that BTC’s price will surpass the $1 million mark within the next decade.

Poised to Profit From Spot Bitcoin ETF Approval

ARK is among a group of reputable asset management firms that are perfectly positioned to benefit from the approval of a Spot Bitcoin ETF (exchange-traded fund). Wood’s firm has submitted its own spot Bitcoin ETF application alongside 21Shares and has also invested in the Grayscale Bitcoin Trust (GBTC).

Last November, ARK purchased a substantial amount of GBTC shares when they were trading at a 40% discount. This large accumulation has made Wood’s firm the largest holder in the fund and has yielded around a 224% return to date for the asset manager, even after it sold some its GBTC shares last month.