Cathie Wood’s Ark: Bitcoin Spot ETF Reduces Friction Costs, Gradually Replacing Gold

ARK Invest CEO Cathie Wood pointed out on the official Ark Invest YouTube channel that after the launch of a Bitcoin spot ETF, Bitcoin is gradually replacing the position of gold.
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Big Ideas 2024 | Bitcoin’s optimal allocation is 19.4%, with a potential target price of $2.3 million
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Bitcoin self-proven hedging asset status
Bitcoin ETF launch leads to a decline, transferring from weak hands to strong hands
Bitcoin has become a substitute for gold
Bitcoin self-proven hedging asset status
Although Bitcoin’s performance after the US banking crisis last year has been cited by many analysts as a classic case of “Bitcoin hedging ability,” Cathie Wood emphasized this once again.
She pointed out that when the US KBW Bank Index plummeted, Bitcoin quickly soared, rising more than 40% by May last year, confirming its role as a risk hedging asset.
Bitcoin rose against the trend in March last year
Bitcoin ETF launch leads to a decline, transferring from weak hands to strong hands
Cathie Wood believes that the launch of the Bitcoin ETF is a representation of the public’s pursuit of high-quality, secure assets.
Regarding the decline after the launch of the Bitcoin ETF, she pointed out that this is because many opportunistic investors buy Bitcoin in anticipation, leading to a sell-off after the news, but she emphasized:
If you have been paying attention, you will understand that out of the existing circulating 19.5 million Bitcoins, about 15 million are held long-term by what we call strong hands, and they have not transferred Bitcoin in over 155 days.
Bitcoin has become a substitute for gold
Cathie Wood finally quoted the Bitcoin to Gold Ratio to indicate that Bitcoin has consistently outperformed gold and has indeed become a substitute for gold. She said:
We believe that this situation (outperforming gold) will continue because there is a simpler, less frictional way (spot ETF) to access Bitcoin. We also mentioned in Big Ideas 2024 that the participation of institutional investors will have an impact on the price of Bitcoin.
The Bitcoin to Gold Ratio divides the price of Bitcoin by the price of gold, representing the amount of gold required to purchase a single Bitcoin. When this ratio rises, Bitcoin outperforms gold, and vice versa. Currently, the ratio of 20.7 is only second to the period of Bitcoin’s historical high in 2021.
Bitcoin to Gold Ratio
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Further Reading
CoinGecko predicts an average consensus price of $87,000 for Bitcoin after the halving
The end of the Grayscale era? Ark Invest liquidates all GBTC and buys BITO.