Recent turmoil in the banking sector has shown that Bitcoin (BTC) and Ether (ETH) can withstand a shaky economy, outperform other asset classes and perform like gold, says ARK Invest CEO Cathie Wood, although a long-time investor is not yet. unsold
Wood explained in an April 15 interview that Bitcoin’s resilience during the most recent banking crisis has been “the most notable” of all the indicators his technology-focused investment management firm is monitoring.
Bitcoin and Ether now act as “risk free” assets and a “flight to safety” for investors amid macroeconomic uncertainty, he stated:
“They are going to upset the traditional world order. What are Bitcoin and Ether doing? I mean the very fact that they are considered a safe flight as gold, that’s really interesting and suggests a much broader based adoption and acceptance than I think most people understand.”
“We would say that there is a flight to safety, certainly led by crypto assets, and it tells us that the world is transforming and will continue to transform. You can’t stop innovation,” he added.
Why have bitcoin and other crypto assets appreciated during this banking crisis? In our opinion, and in contrast to those in the traditional financial world, many crypto assets do not face central points of failure: they are decentralized, transparent and auditable.
—Cathie Wood (@CathieDWood) March 23, 2023
Wood believes that cryptocurrency will eventually become an “electoral issue” when the sector becomes more widely accepted and the public can see more clearly the kinds of regulatory pressures the US government is placing on the industry to maintain centralized control. of money and monetary policy.
Not everyone shares Wood’s sentiment.
Ray Dalio, founder of Bridgewater Associates, the world’s largest hedge fund by assets under management, explained in an April 12 interview that Bitcoin cannot serve as an “effective currency” because it is too volatile and central banks will not adopt it:
“Bitcoin is not an effective store of wealth or a medium of exchange, so it is not an effective currency. It has a volatility that is not related to practically anything (…) it is a very, very poor alternative to gold”.
“They can outlaw (Bitcoin). They can regulate it. Central banks and countries pretty much don’t want it anyway,” he said, adding that it draws attention “far out of proportion” to its size.
Related: Bitcoin Likely to Outperform All Crypto Assets Post-Banking Crisis, Analyst Explains
Dalio bolstered his case by pointing out that gold is the third largest reserve held by central banks, behind only the US dollar and the euro.
Despite previously describing Bitcoin as “a great invention,” Dalio recently explained that he instead wants to see an “inflation-linked” currency built that serves to ensure consumers secure their purchasing power.
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