Bitcoin: Hedge Against Horrible Government Fiscal Policy

Bitcoin is experiencing a surge in value because investors see it as a safe haven against the devaluation of fiat currencies, according to Cathie Wood, the CEO of ARK Invest. In an interview with CNBC, Wood described Bitcoin as both a risk-on and risk-off investment. She believes that currency devaluations across the world are contributing to the rise in its price. Wood pointed out the devaluations of currencies such as the Nigerian naira and Egyptian pound, which have lost almost half of their value against the US dollar in recent months due to deliberate government interventions. This phenomenon, she suggested, is causing individuals to seek refuge in Bitcoin as a hedge against devaluation and a way to preserve wealth.

Wood also compared Bitcoin to an insurance policy against rogue regimes and poor fiscal and monetary policies. She mentioned the US regional banking crisis last year and the Greek financial crisis in 2013 as examples of events that drove up the price of Bitcoin. This aligns with Wood’s consistent support for Bitcoin this year as ARK’s ETF product competes with major asset managers. The fund experienced unusual net outflows of nearly $90 million, possibly due to quarterly rebalancing flows.

According to data from crypto intelligence firm Arkham, there were preliminary outflows from the Grayscale Bitcoin Trust (GBTC) amounting to around $130 million, which surpassed ARK’s outflows on April 2. These outflows could be the reason behind the decrease in ARK’s fund. Despite this temporary setback, Wood remains optimistic about Bitcoin’s future. She previously predicted that Bitcoin could reach a price of $1 million before 2030, primarily driven by institutional investment. Wood believes that the majority of potential investors are yet to enter the market, indicating further growth potential for Bitcoin.

Wood’s view is that Bitcoin’s current rise in value is not solely due to the introduction of new exchange-traded funds but also driven by the global devaluation of fiat currencies. People are increasingly turning to Bitcoin as a safe haven and protection against losing purchasing power and wealth.