ARK Investment Management, founder and crypto believer, Cathie Wood, says that she remains quite optimistic about the crypto world.
During the latest “In the Know” podcast, Wood talked about the volatility in the crypto market and the future of the industry. Wood said, “You’ll see our Bitcoin BTC/USD monthly; I would say we’re neutral to positive. We’re waiting for a few more capitulation signals, and, of course, time will tell on the systemic side here.”
The recent crypto market plunge has been attributed to many factors. On a macro level, the market uncertainties were primarily due to concerns about inflation, rising interest rates worldwide, and the ongoing war in Ukraine.
However, Wood believes that the current downturn assures the crypto industry’s long-term outlook.
She said that the transparency of the crypto market could significantly impact traditional financial markets.
“What’s happened in the crypto market gives you a sense of why it will work [in the] long run. It’s transparent, and there’s a lot more trust in the crypto ecosystem because of the transparency and the over-collateralization than I think there is in the traditional financial markets,” she added.
Talking about the downturn, she said that the crypto market alerted us that the pursuit of yield went too far, and there was too much leverage.
“Hedge funds leverage 10 to one when yields are 2%, so they can reach their return objectives. Maybe there are some problems out there, and we will find out,” Wood said.