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In 2018, Cathie Wood, CEO of Ark Invest, sadly predicted that Tesla shares would hit $ 4,000 within a few years. Investors and critics alike ostracized his high conviction bet because at the time Tesla was facing a major liquidity crunch and on the verge of bankruptcy.
It seemed like an impossible task for the automaker to appreciate 1,200% when it could barely stay solvent. But luckily, Wood’s bet on Tesla came true earlier this year, as Tesla shares rose to $ 800, the expected pre-stock split of $ 4,000.
Cathie Wood remains ultra-bullish on Bitcoin
Now the star-studded asset manager is betting on Bitcoin to continue to soar. Cathie Wood has long championed digital assets, with her ARKW fund holding around $ 370 million in GrayScale Bitcoin Trust (GBTC).
As Bitcoin prices have risen this year, its market cap has reached $ 1 trillion. Although this is a monumental achievement for the world’s largest cryptocurrency, many analysts and investors doubted the future growth of digital currency, citing limited upside potential. Wood, however, argued that Bitcoin’s market cap of over $ 1 trillion was just the start. In a recent CBOE panel, she says:
“If we add all the potential demand over the limited supply, we come up with incredible numbers in the long run. We have just started. A trillion dollars is nothing compared to what it will end up being.
She said that one of the most surprising developments for the cryptocurrency was the surge in institutional demand. As the US economy faces inflationary pressures with potential interest rate hikes by 2023, analysts have predicted the dollar will depreciate.
As a result, large institutional firms and asset management firms began to accumulate Bitcoin and other cryptocurrencies, withdrawing millions of coins. According to figures from Glassnode, the illiquid supply of Bitcoin continued to increase steadily throughout 2021.
Institutional demand far exceeds Ark’s expectations
Wood also commented on the big tech companies adding Bitcoin to its balance sheet and Tesla’s recent decision to accept Bitcoin payments:
“We’ve seen Square do this, Tesla do it, MicroStrategy said, I mean he defines his business around him now. And one of the reasons, as Tesla announced yesterday, is that they would like to do Bitcoin business in parts of the world … where converting from one fiat to another is prohibitively expensive.
Hailed as a “visionary” by some, Cathie Wood has often been ahead of Wall Street in adapting to an increasingly digital world. Will she be right about Bitcoin? That remains to be seen – but his track record speaks for itself.
Featured image from UnSplash
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