Key Points
- Bitcoin’s rise is attributed to it being a “flight to safety” against depreciating fiat currencies, according to ARK Invest CEO Cathie Wood.
- Wood believes that the depreciation of currencies like the Nigerian naira and Egyptian pound is driving Bitcoin’s price.
ARK Invest CEO Cathie Wood has shared her views on the reasons behind the rising value of Bitcoin (BTC).
In a recent discussion with CNBC, she characterized Bitcoin as both a risk-on and risk-off investment.
Fiat Devaluation and Bitcoin’s Price
Wood believes that while the launch of new exchange-traded funds (ETFs) in the United States has influenced Bitcoin’s mainstream narrative, another significant factor is at play.
She points out that while institutions are gaining exposure to Bitcoin, everyday people are being presented with a crucial opportunity.
“There’s something else going on around the world,” Wood stated, referring to unspoken currency devaluations.
She cited the Nigerian naira and Egyptian pound as examples, both of which have lost approximately half their value against the U.S. dollar recently.
Wood attributes these devaluations not to direct market forces, but to intentional government interventions.
Bitcoin as Safety Net
Wood argued that this is a “flight to safety,” a hedge against devaluation and a loss of purchasing power and wealth.
She also mentioned last year’s U.S. regional banking crisis and the 2013 Greek financial crisis, which both contributed to Bitcoin’s price increase.
Wood concluded by stating that Bitcoin is an insurance policy against rogue regimes or poor fiscal and monetary policies.
Despite recent uncharacteristic net outflows of nearly $90 million from ARK’s ETF product, Wood remains publicly supportive of Bitcoin.
She believes these outflows are due to quarterly rebalancing flows.
Preliminary data from Arkham, a crypto intelligence firm, showed outflows from the Grayscale Bitcoin Trust (GBTC) at around $130 million.
Wood has previously predicted a $1 million Bitcoin price tag before 2030, mainly due to new institutional money inflows.
She added that the majority of the target market is not yet on board.
