According to Cathie Wood of Ark Invest, Bitcoin’s long-term outlook is getting better.
The CEO and chief investment officer of the explosively popular active management firm told CNBC this week that the cryptocurrency’s catalysts are adding up as it soars to unprecedented new highs.
“I think the odds of an ETF have gone up,” Wood told CNBC’s “ETF Edge” in an extensive interview on Wednesday.
With Gary Gensler – a longtime funder who taught digital currency at the Massachusetts Institute of Technology – being nominated to head the Securities and Exchange Commission, the watchdog could get hot for crypto during the Biden administration, Wood said.
“I think we now have individuals who really understand the space and I think the likelihood has increased” for a US bitcoin ETF.
Purpose Investments received approval this week for the first-ever physically backed bitcoin ETF in Canada. The fund started trading on Thursday.
As U.S. companies, including Ark Invest favorite Tesla, add bitcoin to their balance sheets, earnings potential has grown exponentially, Wood said.
“We expected institutional interest to pick up this year and it certainly is, but the way it is attracting has surprised us,” she said. “I don’t think we ever thought that bitcoin would be widely replaced by corporate balance sheet cash, so we find that very interesting.”
Tesla unveiled a $ 1.5 billion bet on bitcoin via SEC filings earlier this month. Several other major players in the US market, including BlackRock, Mastercard and Square, have also announced their move into the space.
“If all companies in the United States … put 10% of their money into bitcoin, that would add $ 200,000 to the bitcoin price alone,” Wood said. “Now, of course we don’t believe this will happen very soon. We’re talking about maybe the equivalent of [a] $ 900 billion market cap. “
Bitcoin’s market value cracked $ 1 trillion on Friday, according to news site Coindesk.
“This has to mature a bit before widespread adoption can take place, but we are very reassured that companies like Square and Tesla have chosen to allocate,” Wood said Wednesday.
Check out Som Seif’s, the founder of Purpose Investments “ETF Edge” interview about his just-launched bitcoin ETF here