Cathie Wood: Bitcoin going beyond US$1m post-halving | nzherald.co.nz
Summary
TLDRIn 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
- đ Kathy Wood predicts Bitcoin's valuation to surpass $1 million, influenced by this year's ETFs and the upcoming Halving event.
- đ The awareness and knowledge about Bitcoin have significantly increased since four years ago, potentially impacting its price dynamics.
- đ The fourth Halving event is expected in April, reducing the daily production cap of Bitcoin from 900 to 450, affecting supply dynamics.
- đ ïž The Halving will make the last few million Bitcoins more difficult to produce, increasing the cost and computational effort required for mining.
- đ Historically, Halving events have eventually boosted Bitcoin's price, and the current landscape is more limited in supply due to ETFs.
- đč ETF managers like Black Rock, Fidelity, and Ark are absorbing liquid supply, providing exposure to Bitcoin without owning the asset.
- đŠ Kathy Wood's firm, ARK Invest, is behind the third-largest Bitcoin ETF, with inflows exceeding initial expectations.
- đ The ETF infrastructure is ready to arbitrage events like the Halving, which could accelerate price increases.
- đ Long-term Bitcoin holders, who have not moved their coins for at least 155 days, account for a significant portion of the total supply.
- đ 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.
- đ 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
Bitcoin's Future and ETFs Impact đ
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.
Bitcoin ETFs and Market Expectations đ
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.
Halving Event and Bitcoin Supply Dynamics đ
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.
Bitcoin as a Risk-Off Asset and Institutional Adoption đĄïž
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.
Coinbase's Growth and Trust in Cryptocurrency đ
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.
AI's Role in the Future and Tesla's Position đ€
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.
Mindmap
Keywords
đĄBitcoin
đĄETFs (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]
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