Bitcoin Gaining Ground as Gold Loses Popularity: Cathie Wood
According to Ark Invest CEO Cathie Wood, Bitcoin is gradually replacing gold as a preferred investment option due to the declining popularity of the precious metal. In a video presentation released by Ark, Wood highlighted how commodities, including gold, have failed to serve as reliable inflation hedges over the years.
A Historical Look at Bitcoin vs. Gold
In 1981, gold traded at $555 per ounce and outperformed other commodities for several decades. However, its growth has been limited since reaching $1,800 in 2011. In contrast, Bitcoin’s value has skyrocketed from $1 in 2011 to $43,000 today, surpassing gold’s performance in almost all timeframes. Wood pointed out that Bitcoin is often referred to as digital gold due to its decentralized nature and limited supply.
Bitcoin’s Reaction to ETFs
Although Bitcoin initially experienced a brief decline compared to gold after the launch of US spot ETFs last month, its price has since returned to pre-launch levels. Gold also had a slow start when its first ETF was introduced in 2004 before embarking on a significant bull run. Wood believes that Bitcoin’s decline after the ETF launch was a “sell the news event” where speculators take profits after an expected positive event occurs.
Bitcoin’s Appeal as a Safe Haven Asset
About 15 million BTC out of the 19.5 million in circulation are still held by long-term holders who have not moved their coins on the blockchain for more than five months. Wood sees this as evidence that Bitcoin is viewed as a flight to safety and quality during uncertain economic times. She believes that the ease of access provided by ETFs will further drive the substitution of gold with Bitcoin as an investment choice.
Hot Take: Investors Shifting from Gold to Bitcoin
Ark Invest CEO Cathie Wood asserts that Bitcoin is gradually replacing gold in the investment landscape. As commodities, including gold, fail to act as reliable inflation hedges, Bitcoin’s decentralized nature and limited supply make it a preferred digital alternative to gold. Despite a brief decline after the launch of US spot ETFs, Bitcoin’s price has rebounded. Wood sees this decline as a “sell the news event” and believes that the ease of access provided by ETFs will continue to drive the substitution of gold with Bitcoin. She predicts that this trend will persist as more investors recognize Bitcoin’s appeal as a safe haven asset.
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