Cat Wood replacing gold with Bitcoin is now underway.
According to the CEO of ARK Invest, investors started moving from gold to Bitcoin (BTC) after the launch of Bitcoin Exchange Traded Funds (ETFs).
“Bitcoin has been rising relative to gold. There is now a replacement for bitcoin, and we think the collision course for bitcoin will continue,” ARK Invest's Kathy Woods said in a February 4 interview with chief futurist Brett Winton on the company's YouTube channel.
Like gold, Wood expects Bitcoin to prove itself as a “risk-on asset” when the banking sector shows signs of weakness.
The CEO of ARK Invest said the market saw this in March 2023 when the United States experienced a “regional banking crisis” – causing the price of Bitcoin to rise 40 percent.
“The regional bank index was pushing and here again the regional bank index is doing,” she said.
“The idea that this is about flying for quality or flying for safety is proving itself here.”
According to a recent analysis by Fidelity, Bitcoin's correlation with gold increased in 2023, despite its previously inverse correlation with interest rates rising globally.
According to Longtermtrends, the one-year rolling correlation between Bitcoin and gold currently sits at 0.80, an all-time high.
As for the launch of the spot Bitcoin ETF, Wood said she wasn't surprised by the price correction — which saw bitcoin drop 20% from $48,500 to $38,740 a few hours later on January 24, according to CoinGecko. Before the launch, Wood predicted that the launch would produce a “newsworthy” event.
However, she noted that of the 19.5 million bitcoins currently in circulation, 15 million haven't moved in 155 days and thus remain in “strong hands,” which could indicate that most Bitcoin holders are taking a long-term view.
Related: Bitcoin is now a ‘public good' – ARK Invest President
Wood's firm was one of 10 ETF issuers to launch a Bitcoin ETF on January 11, called the ARK 21Shares Bitcoin ETF.
The Ark 21Shares ETF is currently holding $705.8 million in Bitcoin after the close of business last week, BitMEX research data shows. Only Greyscale's GBTC, BlackRock's IBIT and Fidelity's FBTC products contain additional bitcoins.
ARK Invest, led by Wood, became the largest buyer of cryptocurrency exchange Coinbase (COIN) in February 2022, currently holding 7.187 million shares, worth $843 million, in several ETFs, according to data obtained by Cathy ARK.
The firm, however, has been strongly selling COIN since June 7, when it held 11.43 million shares.
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