Cathie Wood Says Bitcoin To Replace Gold As Safe-Haven Amid US Banking Crisis

The Bitcoin ETF launch attracted strong inflows from retail and institutional players over the last month. Ark Invest’s Cathie Wood believes that Bitcoin will replace Gold as a safe-haven asset sooner than expected.

Bitcoin Offers Flight to Quality Amid Economic Uncertainty

In a recent YouTube update, Cathie Wood of ArkInvest delves into her perspective on Bitcoin’s current behavior, emphasizing its role as a risk-off asset and a perceived “flight to quality” amid economic uncertainties.

Wood notes a pattern observed during last year’s regional bank crisis in March when the BTC price experienced a notable 40% surge while the regional bank index, represented by KRE, was facing challenges. Drawing parallels to the present, Wood points out that Bitcoin is once again gaining traction as the regional bank index exhibits signs of volatility.

She suggests that the notion of Bitcoin acting as a “flight to quality” is becoming more evident. On the other hand, global markets like China are also facing strong economic uncertainties with more investors now seeking exposure to Bitcoin.

Exploring the recent dip in BTC price after the introduction of 11 ETFs, Wood attributes the decline to anticipatory buying leading up to the ETFs’ release and a subsequent “sell-on-the-news” phenomenon, often driven by opportunistic trading strategies.

Wood further supports her perspective by sharing a chart depicting Bitcoin’s price in comparison to gold, showcasing a robust, long-term uptrend. This trend, according to Wood, reflects Bitcoin’s ongoing process of potentially replacing gold to some extent in the investment landscape.

As Bitcoin continues to navigate market dynamics and economic uncertainties, Wood’s insights provide valuable perspectives on the cryptocurrency’s evolving role in the broader financial landscape. Stay tuned for further developments and analyses from ArkInvest. Wood said:

“This chart just shows you that even relative to gold, Bitcoin has been rising. There’s now a substitution into Bitcoin and we think that is going to continue now that there is a much easier way, less friction-filled way to access Bitcoin.”

BTC vs Gold In 2024

Wall Street currently is grappling with yet another regional banking crisis situation while many big companies have already announced massive layoffs for this year in 2024. Bloomberg Intelligence strategist Mike McGlone believes that the US could be heading for a recession in the later part of the year.

While Bitcoin supporters continue to believe that BTC could be a strong hedge against the crashing bond and stock market, McGlone thinks otherwise. Bloomberg’s senior commodity strategist, Mike McGlone, anticipates that Bitcoin is poised for a less favorable performance compared to the stock market on a risk-adjusted basis in 2024.

Contrary to common market expectations, McGlone suggests that the assumption of potential interest rate cuts by the United States Federal Reserve, typically beneficial for risk-on assets like Bitcoin, might not materialize as anticipated. As a result, he suggests that gold could outpace Bitcoin in terms of performance during the year.