Cathie Wood: Bitcoin going beyond US$1m post-halving | nzherald.co.nz

Summary

In an insightful interview, Kathy Wood, CEO of ARK Invest, shares her bullish outlook on Bitcoin, predicting it to surpass a million-dollar valuation. She discusses the impact of ETFs and the upcoming halving event on Bitcoin's supply and demand dynamics. Wood emphasizes the importance of Bitcoin as a hedge against traditional monetary systems and its potential to revolutionize financial services. She also touches on the role of AI in the future, highlighting Tesla's significant data advantage in the autonomous driving space.

Takeaways

• 🚀 Kathy Wood predicts Bitcoin's valuation to surpass $1 million, influenced by this year's ETFs and the upcoming Halving event.
• 🌐 The awareness and knowledge about Bitcoin have significantly increased since four years ago, potentially impacting its price dynamics.
• 🔖 The fourth Halving event is expected in April, reducing the daily production cap of Bitcoin from 900 to 450, affecting supply dynamics.
• 🛠️ The Halving will make the last few million Bitcoins more difficult to produce, increasing the cost and computational effort required for mining.
• 📈 Historically, Halving events have eventually boosted Bitcoin's price, and the current landscape is more limited in supply due to ETFs.
• 💹 ETF managers like Black Rock, Fidelity, and Ark are absorbing liquid supply, providing exposure to Bitcoin without owning the asset.
• 🏦 Kathy Wood's firm, ARK Invest, is behind the third-largest Bitcoin ETF, with inflows exceeding initial expectations.
• 🌐 The ETF infrastructure is ready to arbitrage events like the Halving, which could accelerate price increases.
• 🔄 Long-term Bitcoin holders, who have not moved their coins for at least 155 days, account for a significant portion of the total supply.
• 📊 ARK Invest's Bitcoin ETF holds a significant percentage of the total Bitcoin supply, and the firm anticipates a substantial increase in the price of Bitcoin by 2030.
• 🔄 The trust in traditional monetary systems is eroding, and Bitcoin is seen as a hedge against such systems, especially in emerging markets.

Q & A

What is Kathy Wood's target valuation for Bitcoin?

Kathy Wood's target valuation for Bitcoin is above one million dollars, with a long-term target set for 2030, expecting it to be worth 20 trillion dollars.

How does the upcoming Halving event affect Bitcoin's supply dynamics?

The upcoming Halving event will reduce the growth rate of Bitcoin supply from approximately 1.9% to 0.9%, dropping below 1% for the first time, which is lower than the average supply growth of gold.

What is the significance of ETFs for Bitcoin's liquidity and market dynamics?

ETFs have increased the liquidity of Bitcoin by providing a means for retail and institutional investors to gain exposure to Bitcoin without owning the underlying asset, which has also helped to reduce the friction in buying Bitcoin.

How does Kathy Wood view the role of Bitcoin in the financial services and monetary revolutions?

Kathy Wood sees Bitcoin as a global, private, decentralized monetary system without government oversight, which she believes will be a significant part of a financial services and monetary revolution.

What is the current percentage of Bitcoin held by long-term holders according to the script?

Long-term holders, who have not moved their Bitcoin from their wallets for at least 155 days, account for about 15 million of the 19.5 million Bitcoin outstanding.

How does Kathy Wood's firm, ARK Invest, position itself in the Bitcoin ETF market compared to other competitors like BlackRock and Fidelity?

ARK Invest's Bitcoin ETF, ARK 21 Shares, is positioned as the third largest in the market, with over 2.1 billion in assets under management, focusing on providing access to Bitcoin at the lowest cost.

What is Kathy Wood's perspective on the potential for Bitcoin to be held in treasuries of emerging market countries?

Kathy Wood believes that Bitcoin could serve as a hedge for emerging market countries against currency devaluation and loss of foreign exchange reserves, potentially leading to a competitive dynamic where countries that treat Bitcoin favorably gain share.

How does the script address the issue of trust in the traditional monetary system?

The script suggests that trust in the traditional monetary system is eroding, with historical examples of fiat currencies losing value and the recent financial instability of regional banks in the United States highlighting the risks associated with counterparty risk.

What are the four characteristics that Kathy Wood believes companies need to capitalize on AI, using Tesla as an example?

According to Kathy Wood, companies need deep domain expertise, proprietary data, global distribution, and the ability to harness AI technology to capitalize on the AI age, as exemplified by Tesla's autonomous driving network.

Why did ARK Invest trim its holdings in Coinbase despite its success as a custodian for many ETFs?

ARK Invest trimmed its holdings in Coinbase as part of portfolio management, taking profits and reallocating to names that are being punished for short-term reasons, while maintaining a high conviction in the company's long-term success.

Outlines

00:00

Bitcoin's Future and ETFs Impact 🚀

Kathy Wood discusses the potential for Bitcoin to surpass a million-dollar valuation, influenced by this year's ETFs and the upcoming Halving event. She highlights the increased awareness of Bitcoin and the changing supply-demand dynamics. The halving will reduce the daily production cap of Bitcoin, making the last few million coins more difficult to produce. Historically, halvings have boosted Bitcoin's price, and with ETFs like Black Rock, Fidelity, and ARK investing, the supply is becoming more limited. Kathy Wood emphasizes the importance of Bitcoin as a financial revolution and predicts a significant increase in its value by 2030.

05:03

Bitcoin ETFs and Market Expectations 📈

The conversation turns to the performance of Bitcoin ETFs, with Kathy Wood expressing satisfaction over the inflows into her fund, particularly against larger competitors. She credits her team and partners for the success and discusses the potential for Bitcoin and other crypto assets to surpass the size of the world's largest ETF, the SPY ETF. Wood also shares her belief that Bitcoin alone could be worth 20 trillion dollars by 2030, and while the exact percentage of ETFs in that value is unknown, the current ETFs hold about 3.9% of all Bitcoin. She also addresses the concern of centralization with ETFs, emphasizing that the decisions are made by individual clients, not the fund itself.

10:05

Halving Event and Bitcoin Supply Dynamics 🔗

The discussion continues with the implications of the upcoming Bitcoin halving event, which is expected to reduce the supply growth rate below 1% for the first time. This is a significant milestone as it drops below the average supply growth of gold. Kathy Wood points out that unlike gold, Bitcoin's supply cannot respond to price spikes with increased mining. She also addresses the concern that less profitable miners might offload Bitcoin into the market after the halving, but she believes that the ETF infrastructure will help mitigate this impact by arbitraging such events.

15:06

Bitcoin as a Risk-Off Asset and Institutional Adoption 🛡️

Kathy Wood reflects on the events of March 2023, where a regional bank crisis led to a surge in Bitcoin's value, demonstrating its status as a risk-off asset. She argues that Bitcoin's low correlation with other assets makes it an attractive option for institutional investors, who have a fiduciary responsibility to consider it in their asset allocation. Despite some institutions like Vanguard refusing to invest in Bitcoin, Wood believes that the demand for Bitcoin will continue to grow, and she forecasts a timeline for Bitcoin to reach a value of over a million dollars.

20:08

Coinbase's Growth and Trust in Cryptocurrency 🌐

The conversation shifts to Coinbase, which has seen growth as a custodian for many ETFs. Despite trimming holdings in Coinbase, Kathy Wood remains optimistic about its future, citing its trusted nature and regulatory compliance. She believes that Coinbase's success in expanding internationally and its response to regulatory challenges will make it a premier exchange in the coming years. The discussion also touches on the importance of trust in the traditional monetary system, with Wood expressing concerns about the Federal Reserve's power over global markets and the history of fiat currencies.

25:08

AI's Role in the Future and Tesla's Position 🤖

Kathy Wood expresses her enthusiasm for AI and its potential impact on various industries. She discusses the characteristics that companies need to capitalize on AI, using Tesla as an example. Tesla's deep domain expertise, global distribution, and proprietary data collection make it a prime candidate for AI success. However, she notes that despite Tesla's potential, it is currently undervalued due to market sentiment towards electric vehicles. Wood emphasizes that companies that meet these criteria will be well-positioned to benefit from the AI age.

Keywords

💡Bitcoin

Bitcoin is a decentralized digital currency that operates without a central bank or single administrator. It is the first and most well-known cryptocurrency. In the video, Kathy Wood discusses the potential for Bitcoin's value to surpass a million dollars, influenced by factors such as ETFs, halving events, and increasing demand.

💡ETFs (Exchange-Traded Funds)

Highlights

Kathy Wood predicts Bitcoin could reach valuations beyond a million dollars.

This year's ETFs and the upcoming Halving event are expected to change Bitcoin's supply-demand dynamics.

Kathy Wood's firm, ARK Invest, is behind the third-largest Bitcoin ETF.

ARK 21 Shares ETF has experienced inflows of over 2.1 billion dollars.

Bitcoin's price rally is influenced by the launch of spot price exchange-traded funds.

The Halving event, expected in April, will reduce the block reward for mining Bitcoin, affecting supply.

ETFs like ARK 21 Shares are providing access to Bitcoin at lower costs, attracting more investors.

Kathy Wood believes that Bitcoin and other crypto assets could eventually surpass the size of the SPY ETF.

Bitcoin's supply growth is expected to drop below 1% for the first time, similar to gold's average supply growth.

Long-term Bitcoin holders, who have not moved their Bitcoin for at least 155 days, account for 15 million of the 19.5 million outstanding Bitcoins.

Kathy Wood sees Bitcoin as a global, private, digital, decentralized monetary system without government oversight.

The ETF infrastructure is ready to arbitrage events like the Halving, potentially accelerating price increases.

Kathy Wood's price target for Bitcoin is north of one million US dollars, depending on institutional allocation.

The SEC's approval of Bitcoin ETFs has pulled forward the timeline for Bitcoin's price target.

Kathy Wood's firm has been trimming holdings in Coinbase due to portfolio management strategies.

Coinbase is gaining share as other exchanges face challenges, positioning it to become the premier exchange globally.

Kathy Wood discusses the erosion of trust in the traditional monetary system and the potential for Bitcoin as a hedge.

Emerging markets like El Salvador are embracing Bitcoin, which could lead to regulatory arbitrage opportunities.

Kathy Wood's firm is focusing on companies that meet specific criteria to capitalize on the AI age.

Tesla is seen as a prime example of a company that could benefit from AI, despite current market sentiment.

Kathy Wood emphasizes the importance of proprietary data in AI development, using Tesla's autonomous driving data as an example.

Transcripts

Kathy Wood sees Bitcoin going Beyond a

million doll valuation how this year's

ETFs and Haring change the supply demand

Dynamics yes our Target is above that

think about how many people know even

know about the having this time around

when they didn't even know what Bitcoin

was four years ago they didn't know what

it truly was it's Friday the 8th of

March and you're watching markets with

medicine

the price of Bitcoin is rallying after

the launch of spot price exchange traded

funds and ahead of this year's Haring

event with the production of Bitcoin set

to change and demand seemingly ever

increasing what could that mean for its

price the fourth Haring event is set to

occur in April this year it's when the

block reward earned for mining Bitcoin

is cut in half at the moment the daily

production cap is 900 Bitcoin that will

soon drop to

450 only 21 million Bitcoin total can

ever be issued it's hardcoded into the

network there's already more than 19

million out there the harving will make

the last few million more painstaking to

produce it's not expected to end until

the year

2140 it means the price to produce

Bitcoin also increases the amount of

compute required to M Bitcoin its hash

rate is already around all-time highs

that's good for security of the network

because it had take an enormous amount

of effort and electricity to bring it

down historically harving have

eventually boosted bitcoin's price and

today's landscape is different than any

event before Supply is even more limited

as ETF managers Black Rock Fidelity Ark

and others is sucking up Liquid Supply

EF approval have given retail and

institutional investors a means to get

exposure to bitcoin without having to

own the underlying asset Kathy Wood of

Aran vest is behind the third largest

Bitcoin ETF I spoke to her this

week Kathy thank you so much for coming

on the show again amazing to chat with

you today oh my pleasure Marie Kathy

last time we spoke must have been a

little over a year ago now at that time

Bitcoin ETFs did not exist and the price

of Bitcoin certainly was not where it is

now so congratulations on the launch of

your Arc 21 shares ETF how have the

inflows you've experienced into that

fund compared to your initial

expectations well we didn't know uh we

didn't know until the very end what gbtc

was going to do if gbtc which was the

grayscale Bitcoin Investment Trust had

cut its fees to where we are or even

close um the story would have been very

different I think inertia would have

kept uh kept uh clients in that fund uh

but uh gbtc has donated quite a bit of

share it's at about

1.5% uh we're at 21 basis points AR KB

is uh because we're looking at uh at

Bitcoin as a public good it's the

financial superhighway and the most

important thing to us is that we provide

access at the lowest cost to entice as

many people as possible to participate

in what we

believe uh in hindsight will be

considered a revolution a financial

services Revolution and a monetary

Revolution what was that figure of

inflows that you hoped would happen when

these atfs were first approved in

January this year Well we were I I guess

what we were hoping is that uh as uh gbt

was uh seeding share that we would be

among the top three

because we think we we believe that

three ETFs ultimately will win and we

are against most expectations and

against some very formidable and much

larger companies uh we are number three

and actually our number is over 2.1

billion now so we've been uh we've been

very very pleased of course Black Rock

and Fidelity are number one and number

two they're converting their existing

client base from gbt

into uh into their own funds and

attracting new new funds of course uh

but we have a

disproportionate uh amount of new funds

coming in onto our platform how do you

know that how do you know that the funds

coming in to your fund and not just gbtc

outflows or also not people shifting out

of the more expensive Canadian

ETFs well of course we don't know all of

that but we we knew how much we were

going to convert from gbtc so uh and we

know we know that it is a very small

percentage of what we now have uh has

the rest come from uh G gbtc from other

platforms that's very possible but in

terms of what we were converting

internally from gbtc to AR KB uh it was

roughly 100 million out of the 2.1

billion where do you think assets under

management for these f funds are going

not just yours but all of them Michael

sailor thinks that they'll eventually

overtake the Spy ETF which is the

world's largest has hundreds of millions

of dollars worth of funds in it what's

your take on

that well and and be before I answer

that I I do want to give a lot of credit

to to our partners in this David versus

Goliath battle uh 21 shares uh is the

infrastructure and Ops uh of Arc 21

shares and then Resolute is uh our

distribution partner here in the US so

have to give them both lots of credit

and of course our team our incredible

research team as well so uh that done do

we agree with Michael sailor that

ultimately uh this this category um

Bitcoin and other crypto assets could be

uh bigger than spy yes we do absolutely

we do do and uh Bitcoin alone is going

to be the biggest uh part of the entire

crypto asset ecosystem uh our

expectation out in 2030 that it will be

uh a 20 trillion doll it will be worth

20 trillion dollar now how much will

ETFs get of that 20 trillion I don't

know but that already right there is if

you you think about it I mean it runs

circles around spy number one and I

believe all of public equities globally

no matter what rapper they're in uh are

valued right now roughly 120 trillion

dollar so when I say 20 trillion by

2030 um that's that's a very big uh

category how much Bitcoin does your ETF

hold now and if the market for these

funds does get that large to as you side

20 trillion perhaps how much could it

hold well okay so the the all of the

ETFs out there right now hold about

3.9% roughly 4% as of as of today um of

all the Bitcoin outstanding now the

really interesting thing about that is

if if you look at onchain analytics

which our analyst David poel does for us

uh you'll see that uh long-term

holders uh account for I believe

15 15 million of the Bitcoin outstanding

roughly 15 million uh total outstanding

right now is

19.5 million and the total that will

ever be outstanding is 21 million those

long-term holders are not selling that's

what's going on with the price right now

uh and the flows into the

ETFs um have which have taken the

friction out of buying Bitcoin and which

can be used as collateral for loans

whereas Bitcoin itself cannot uh suggest

to us that you know that added one and a

half million to go in Bitcoin uh is

going to have to cover a lot of uh

investors institutions and so forth in

other words the price will have to go

high enough to rest the the the supply

some of the supply out of long-term

holder hands and just to clarify

long-term holders and again you can

track this on chain uh they have not

moved their Bitcoin from their wallets

in uh at least

155 days and when that occurs the odds

that they will move their Bitcoin go

down dramatically unless the price

spikes dramatically so those are the

demand Dynamics at the moment and add to

that the expected Haring event this year

how is the price impact of this year's

Haring perhaps going to be different

this time around because of that

landscape that you've just explained yes

so uh the having so we'll go from

roughly

1.9% growth in Bitcoin Supply per year

down to

0.9% so we will drop below 1% for the

first time and if you look at the

long-term history of gold uh very

longterm uh what you'll find is the

average Supply growth has been roughly

1% so now Bitcoin Supply growth is

dropping below uh the supply growth of

gold that is that is a milestone I would

say um and the other difference here is

when the gold price spikes there's

usually a a mining response and and the

supply spikes with it that cannot happen

with Bitcoin so it's quite a different

Dynamic so the having is that Milestone

and if you look historically after

having it's usually been very good for

the Bitcoin price now uh it doesn't

happen right away uh I think I don't

know know why it doesn't happen right

away but it doesn't uh now that the

Market's becoming more efficient with

ETFs it might because think about how

many people know even know about the

having this time around when they didn't

even know what Bitcoin was four years

ago they didn't know what it truly was

um and if I can just throw one in in

terms of how we try and describe uh what

this monetary Revolution is it's and

each one of these words is important the

first Global that's critical private no

government oversight digital

decentralized rules-based monetary

system in history it is what my mentor

and many people know art laugher for his

laugher curve and fiscal policy and so

forth he's a monetary scholar as well

and he said I have been waiting for this

for 50 years ever since they closed the

gold window in here in the United States

in 1971 I don't want to talk to you

about the fundamentals of Bitcoin but

just there you mentioned Mining and I

think maybe one of the reasons that the

price comes off initially post a Haring

event is because the cost to mine or

rather the compute required to mine

Bitcoin a hash rate increases and it's

already around all-time highs so if less

profitable miners perhaps drop off

because it's going to become more

expensive to mine they could then

offload the Bitcoin into the market how

do you see that potentially impacting

the price this

time yes that does happen each time but

I think what we have going for us this

time is uh the financial markets when

you've got the entire ETF

infrastructure out there ready to

Arbitrage these sorts of events um we

may pull forward the price increase and

accelerate the transition you're talking

about on the topic of Supply funds like

yours are soaking up so much of the onm

market liquid Supply daily now and a

term that I am sure you're aware of that

Bitcoin is often used is Wales and while

you certainly hold enough Bitcoin to be

considered one you don't exactly have

the ability to manipulate the market

because you can't just dump all of the

Bitcoin that you own it's clients that

own that Bitcoin so that' have to decide

to dump it not you so if you're not a

whale what should we call Bitcoin funds

like

yeah well we're

representing thousands of people each of

whom is going to make his or her

decision about what to do with this

Bitcoin uh we are we do not control that

decision our clients do and they are

they are you know they are individuals

who actually have you know they're

they're definitely not whales they're

just tiptoeing into the space so I don't

think you could describe us as a whale

from that point of view I I I do think

that uh the concern about centralization

with ETFs um is on the Market's mind I

think as more and more people understand

that wait a minute there are thousands

and thousands and thousands of people

making decisions here number one uh

we're not making the decision it is our

clients who are leading us there and if

you listen to that Bitcoin brainstorm

you'll see the movement within the

mining Community to counter what they

perceive uh as a centralization and so

it was very interesting to do uh a a a

minor Bitcoin brainstorm as our ETFs are

taking off your price target for Bitcoin

is bull case North of1 million us which

I do know depends on institutions

allocating some of their funds towards

it as an asset class but many still

haven't Vanguard is actually

categorically refusing to at the moment

how much of that institutional mindset

shift still needs to happen and what

does It ultimately mean for your price

Target well I think something very

important happened last year in March of

23 Regional Bank crisis here in the

United States Regional Banks imploded

some went bankrupt and Bitcoin exploded

it went from

19,000 uh to to more than

40,000 what did that demonstrate that

demonstrated that Bitcoin does not have

counterparty risk like Banks do uh and

so it became a risk off asset before we

had just thought of it as a risk on

asset when liquidity is Flowing Bitcoin

will be one of the Prime beneficiaries

but this idea that it is also a risk

asset and as we hope we've shown in our

own uh new asset class uh new asset

class paper white paper you know it it's

correlation with other assets is so low

that uh institutions have a fiduciary uh

responsibility uh from an asset

allocation point of view to at least

look at it and if they want to dismiss

it fine Vanguard did but what we think

Vanguard is doing is well one of two

things Vanguard has never invested in

Commodities so it's just treating this

like a commodity uh for the most part it

hasn't uh uh but we think it's asset

class and they will be Vanguard will be

depriving its uh clients of access to a

new asset class which I if there is

continues to be low correlation of

returns what will happen is those using

it will see increased returns per unit

of risk and they will outcompete the the

Vanguard advisor so you know I think I

think there will become even for

the Vanguard ecosystem a demand poll if

we can just forget Vanguard for a second

discount them because as you say there

seems to be many other demand drivers

for the price in front of us so if you

had that bill case for more than 1

million USD Bitcoin has your forecast

timeline to reach that price now

shortened yes that Target were we uh

evolved in uh it was before the SEC uh

gave us gave us the green line

and I think that was a major Milestone

and it has pulled forward the timeline

um one thing I will say right now no

wirehouse so whether we're talking about

Morgan Stanley uh or maril Lynch BFA or

UBS or Wells

Fargo no no plat as approved uh Bitcoin

yet so all of this price action has

happened before before they approve it

um and so you know we haven't even begun

so what's your timeline for 1 million

USD Bitcoin now and is there perhaps a

price Target beyond that now yes our

Target is above that uh we've got a 2030

Target so it's well above that and and

uh with our new expectations for

institutional

involvement uh the incremental price

that that we assume for in

institutions um actually has more than

doubled so uh you know I don't want to

give out any particular uh uh prices but

because we don't know um how quickly we

don't know how quickly um some the the

more independent registered investment

advisers here in the United States those

platforms are saying give us three

months to do our due diligence the

others are saying we need at least six

months so you know uh I I would put

those in the institutional bucket as

well but in your view Kathy all of the

factors are moving the price of this in

an upwards trajectory yes indeed another

winner in this environment is coinbase

which is a custodian of a lot of these

ETFs I know that you are involved in it

but you've also been recently trimming

your Holdings in it I see why is that

yes um well it's called portfolio

management let's just start there

whenever we see um one of our stocks uh

just crushing it meaning exploding to

the upside caught up in a lot of the

excitement uh we take profits and

reallocate to uh names that are being

you know punished for some very

shortterm reason so it's it's still

number one in the portfolio we're just

taking uh uh profits at the margin still

very high conviction one of the things

that's happened uh since uh FTX went

under and binance uh uh uh um binance

lost its CEO had to pay a heavy fine uh

these other exchanges are losing share

uh and coinbase is moving more

internationally into their territory uh

with great success I might add and I

think one of the reasons is because of

its trusted nature it has tried to be

the most conscientious of regulations of

any of the exchange

and and uh crypto companies out there uh

and despite the SEC suing it the uh um

if you look at the way the court cases

have gone they have gone really

coinbase's way now now we'll see what

happens when the rubber meets the road

and that court case does start but we

think they've um they've behaved uh very

conservatively and respectfully I must

say of Regulation uh and uh they've

tried to earn the trust and now they're

um spreading their wings into the rest

of the world and the other uh whether

bankruptcies or controversies have only

increased their probability of success

during the next few years so we think

they're going to be the premier Exchange

in the world yeah and trust is a really

important point isn't it because trust

is what all of this really comes down to

and a large reason that I understand

Bitcoin is performing as it is now is

because of eroding trust in the

traditional monetary system I'm not sure

if you heard it but the governor of our

Reserve Bank here in New Zealand he said

something publicly that went viral on

Twitter it was a joke I'm pretty sure

but if I can repeat it to you Kathy he

said Central Banking is a great business

to be in print enough money and people

believe it now I haven't quite heard you

talk about this problem publicly and

maybe I just haven't been looking in the

right place but what are your thoughts

on trust in the current system uh yes uh

we do

you know it's interesting for me to

watch the FED hold so much power over

global markets whether Equity or fixed

income uh these are human beings and

they're not even following rules now

they would say yes we are 2% inflation

so maybe this one will end up being

better than most but if you look back in

history and if you look into Emerging

Markets the history of Fiat currencies

is atrocious even the dollar has lost

99% of its value since the FED uh was

created in 1913 I don't think that was

uh I don't think that was supposed to be

the outcome uh at that point in time uh

and and you're seeing some nation states

uh El Salvador is using um as is is

using Bitcoin as legal tender or has

deemed it legal tender we think there

could be a competitive dynamic in

emerging markets in this regard uh not

only deeming it uh legal tender but also

putting some into their treasury to

benefit from uh the appreciation that

we've seen and it could become a

competitive Dynamic too I know we're

much more attracted to looking at

opportunities in El Salvador today

because of uh president

bu's uh attitude and embracing of uh

Bitcoin and everything technology he's

got Enterprise zones he's inviting AI uh

so we think this is an innovation

movement and we think there will be

regulatory Arbitrage around the world

and those countries that treat uh it

more favorably are going to gain share

this is what worried us so much about

the SEC here in the United States um it

was treating uh the the crypto world

like uh a bunch of criminals

uh and to some extent still is as as a

bit of a poor loser when the courts have

ruled that is not your jurisdiction you

you just have to say is it appropriate

for is an ETF rapper appropriate for

this um but we're having many many other

people weigh in academics uh to your

point about uh an antidote to some of

the uh mismanagement and monetary policy

that we've seen through history so

you're then telling me that it would

actually be advantageous for a economies

if governments or at least companies in

those countries held more of their

treasuries in Bitcoin yes and when when

and and especially Emerging Markets if

you look at when they get into trouble

it is when they lose when they when

they're out of Foreign Exchange reserves

they have nothing to protect their

currencies with anymore um well if uh if

a a country's currency is going down but

bitcoin's going up that's a huge hedge

it's going to protect them against

against that uh eventuality because what

usually happens is the IMF comes in and

basically tells them we want you to

increase your taxes cut your spending

we're gonna put we're going to regulate

you more and it would be 180 degrees

against what I would recommend but

that's the IMF prescription so to

protect against that uh Bitcoin would be

a very good hedge opportunities outside

of Bitcoin the big train of the moment

is AI what excites you about it yes so

uh AI is uh top of mind and many people

will say Well then why did you pull out

of Nvidia in your Flagship strategy uh

we do own it in our other strategies but

as you can tell from our trading

activity which we publish at the end of

every day we have been selling it there

as well in those uh portfolios um the

there the companies in our portfolios we

believe uh that are going to harness and

capital and capitalize on AI uh will

meet four characteristics for NVIDIA to

uh to deserve this valuation what I'm

about to say also must be true if it's

not true then Nvidia does not deserve

this evaluation so uh we will use Tesla

as an example that's the largest AI

project in the world uh autonomous

driving networks so what did what are

the four characteristics from an AI

point of view that Tesla has it has deep

domain

expertise uh it is the only auto company

uh that has developed an AI chip

specifically

for uh autonomous driving so it has deep

domain expertise and it is taking AI

very seriously uh we're all going to be

AI companies we're all going to be

impacted by it uh three it has global

distribution but then most important it

has proprietary data that no one has and

we don't think anyone will ever get

because Tesla has five to six million

robots roaming around the world right

now I have two of them a model 3 and a

model y uh collecting data sending it

back every day so they have orders of

magnitude more data than all of the

other auto companies and tech companies

combined trying to enter this space why

is that important it's not the data the

Deluge of data it is the corner cases

those very rare events that happen that

only if you record real world driving

over billions and billions and trillions

of miles will you be able to spot and

warn AI system that this is a

possibility watch out uh no one else can

do that so Tesla is a wonderful example

of a company that is uh probably the

biggest beneficiary of what AI has to

offer and yet it's getting hurt right

now because in the US investors are down

on electric vehicles and they're just

not looking at the autonomous

opportunity and the same is true in the

rest of the world so um our our

portfolio is filled with companies that

meet those four characteristics or

criteria necessary to capitalize on the

AI age so often V is underestimating the

prospects of Tesla fear to say they're

likely overestimating the prospects of

an Nvidia yes it's hard for me to

believe that that they don't believe

that Tesla is going to be successful at

autonomous driving and yet they do

believe that AI is going to transform

the world so you know this is this is

the biggest AI project in the world so

if it doesn't work uh well then um we

have a few more questions to ask about

other AI projects thank you so much for

your time today Kathy and I did just

want to let you know that you do have a

lot of followers here in New Zealand

including a friend of mine jonty who

tells me that he watches all of your

monthly videos so you just wanted me to

pass on his regards to you oh thank you

johy and thank you Maddie I I do

appreciate that thank you so much always

a pleasure to speak with Kathy Wood I

don't think I'll ever get used to the

fact that I'm allowed to speak with

people of her caliber just one word of

caution though Kathy is very clearly a

bull on both Bitcoin and some of those

stocks that she talked about so maybe

just keep that in mind now go put your

money to

[Music]

work thanks for watching markets with

Madison the New Zealand Herald show for

interested investors if you want to stay

up to date with financial markets click

the Subscribe button below and you can

watch our other episodes here stay up to

date with all the business news and

numbers as they land on nzherald.co.nz