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Cathie Wood Says Investors Are Ditching Gold For Bitcoin

Cathie Wood, CEO of Ark Invest, asserts that Bitcoin (BTC) is starting to supplant gold as a favored investment choice, particularly as the allure of the precious metal wanes over time.

In a video presentation released by Ark on Sunday, Wood illustrated how commodities in general have proven to be an unreliable hedge against inflation over several decades.

“We are currently in a situation similar to the early 1980s,” noted Wood regarding the Bloomberg Commodity Index. “This is not adjusted for inflation – one can only speculate how much lower these commodity prices would be.”

Bitcoin VS Gold: A Historical Look

In January 1981, gold was priced at $555 per ounce, indicating it performed better than other commodities over subsequent decades. Despite this, its growth has been relatively restrained since peaking at $1,800 in 2011, now trading at $2,030, 13 years later.

Meanwhile, Bitcoin (BTC) surged from $1 in 2011 to $43,000 today, significantly outpacing gold’s performance across almost all timeframes. Thanks to its decentralized nature and finite supply, Bitcoin is often hailed as digital gold.

“Bitcoin surged 40% amidst the KRE – the regional bank index – collapse,” Wood pointed out, referencing the U.S. banking crisis in March 2023 involving numerous crypto-related banks. Gold also experienced an uptick during this period, albeit not to the same extent.

Bitcoin’s Reaction to ETFs

Despite a temporary setback in Bitcoin’s price relative to gold following the introduction of several U.S. spot ETFs last month, the asset has since rebounded to pre-launch levels. Gold itself had a sluggish start when its first ETF debuted in 2004, before embarking on an eight-year bullish trend from $400 to $1,800.

Wood suggests that Bitcoin’s decline post-ETF launch was a “sell the news event” – a scenario where speculators buy an asset ahead of an anticipated positive event, then capitalize on profits once it materializes.

Approximately 15 million BTC out of the total 19.5 million in circulation remain in “strong hands” – indicating they haven’t been moved on the blockchain within the last 155 days.

“This notion that [Bitcoin] serves as a safe haven or high-quality asset is reaffirming itself,” Wood remarked. “There’s now a shift towards Bitcoin, and we believe this trend will persist given the easier, less cumbersome access to Bitcoin.”

Ark Invest was among the nine asset managers to debut a new Bitcoin spot ETF on January 11.

The ARK 21Shares Bitcoin ETF (ARKB) encountered its first day of zero net inflows on Monday but garnered an additional $8.6 million on Tuesday. To date, it holds approximately $717 million worth of BTC.

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I want to save money. Will cryptocurrency work?

Cryptocurrency is essentially virtual money that operates in a decentralized manner, not through a bank but directly on multiple independent computers.

Every cryptocurrency has two main components: the units of digital exchange called “coins” and the network within which the exchange takes place. These units can be transferred between wallets and exchanged on exchanges. The networks in which these coins exist are called blockchains, which translates to “chains of blocks.”

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