Cathie Wood embraces Bitcoin as a dual hedge against deflation and inflation

In this post:

  • Cathie Wood, the founder of ARK Invest, maintains the belief that Bitcoin (BTC) can function as a hedge against deflation, alongside its potential in an inflationary setting. 
  • Cathie Wood bases her assertions on the regional bank crisis in the U.S. that happened in March, during which a few lenders failed. This crisis had a role in driving up the price of Bitcoin by almost 50%, reaching $35,000. 
  • BTC’s inflationary protective investing repute matches its parallels to digital gold. Wood said bitcoin would be her “hands down” choice for a 10-year investment, even though gold can also hedge against inflation and deflation.

According to Cathie Wood, investing in Bitcoin is a foolproof endeavor that hedges against both inflation and deflation. Market fluctuations are common in the financial world, and considering the high volatility nature of the market, it is tough for investors to find a stable investment that would give significant gains. 

Cathie Woods commented in a recent interview with Bloomberg, stating her opinion on choosing BTC over gold. Bitcoin is considered digital gold, and this attribute has increased investor confidence. Cathie Woods stated that holding the digital currency for 10 years is highly profitable, “hands down.”

Cathie Wood reviews Bitcoin’s usage in these financial times

ARK Invest, an investment management bank, contributed to the idea of digital currencies being a haven for vigorous market fluctuations, either in the long term or short term. Cathie Woods, founder of the ARK Invest firm, made known her opinions on the matter and highlighted that BTC showcases potential in an inflationary environment. 

Cathie Wood appeared on the Merryn Somerset Webb Bloomberg podcast last week and talked about how Bitcoin is free from counterparty risk since the digital currency is decentralized. Its transactions are also visible in the public ledgers, and this makes it a transparent investment, unlike the banks. 

As common Knowledge, centralized organizations are rather opaque, and their inner workings aren’t visible to investors in real-time. Cathie Wood shared her views, saying:

You can only surmise because they’re losing deposits, and they have to fund those by selling securities. The deposit flight has not stopped, and they’re forced to raise interest rates to compete against money market funds.

Cathie Wood

The ARK Invest founder also highlighted the regional bank crisis that took place in the United States early in the first quarter of this year. In March, a handful of lending firms collapsed, and this saw a rise in Bitcoin’s market price that increased by over 50%, reaching levels above $35,000. 

She compared the current BTC surge to the US stock index benchmark, revealing how Bitcoin outperforms them based on historical market data. Wood said:

 Now you see it pumping up again, and you see the regional bank index in the U.S. breaking below where it was in March.

Cathie Wood

Reasons behind Wood’s comments 

Woods was also echoing comments she had made amid the crisis in May, basing her arguments on the collapse of centralized financial authorities along with the prominent crypto exchange firm FXT. 

She illustrated how the incidents have “proved her concept” that Bitcoin, since the digital currency, proved to be a safe haven for solid long-term investment. This can be seen from its resilience against market fluctuations caused by macroeconomic events in the world of finance.

Cathie Wood also mentioned the major dangers of investing with central authorities, specifically banks. 

Moreover, Bitcoin’s features have made it an attractive investment following its reputation of being insulated from potential inflation aligns with its attribute of being digital gold. 

According to Wood, gold is a solid hedge against both deflation and inflation, but in her opinion, digital gold would be a better choice, “hands down.” This is based on a 10-year investment holding that would return substantial profits. She added:

Gold already has its demand; it’s happened. Bitcoin is new; institutions are barely involved. Young people would much prefer to hold bitcoin than to hold gold.

Cathie Wood

Based on Cathie Wood’s review, it is a fact that Bitcoin has been on top as a solid investment that is also stable and resilient to market pressure. In comparison to centralized financial systems, the decentralized nature of the first-generation blockchain, Bitcoin, is a better option based on its transparency, inflationary, and deflationary hedge. 

At the moment, Bitcoin is valued at $34,848.11 per unit (BTC/USD). The coin has a market cap of $680.74 billion, and the 24-hour trading volume stands at $12.48 billion. 

According to CoinGecko, the current valuation of crypto on a global scale is $1.38 trillion, representing a change of 0.53% over the past twenty-four hours and 29.61% over the past year. The current market capitalization of Bitcoin (BTC) is $682 billion, which signifies a 49.55 percent market dominance for Bitcoin.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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