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.