Cathie Wood Predicts Crypto Market Recovery as Liquidity Squeeze Ends

Ark Invest’s CEO, Cathie Wood, has offered optimism to market participants, predicting that the crypto market would soon recover from its recent downtrend. This came as she alluded to the liquidity squeeze, noting that they expect it to reverse within a few weeks.

Cathie Wood Hints At Crypto Market Rebound Within a Month

Speaking during Ark Invest’s November webinar, Cathie Wood suggested that crypto prices could fully recover within the next month as the current liquidity squeeze ends. She noted how the crypto market has always been a leading indicator whenever there is excess liquidity.

Her comments align with BitMEX co-founder Arthur Hayes’ statement in which he attributed the recent market decline to the drop in USD liquidity. Hayes also mentioned more recently that liquidity had improved, especially with the Fed set to end quantitative tightening (QT) on December 1. He also revealed that U.S. banks increased lending this month.

Another positive for the crypto market in terms of liquidity is that the Fed is likely to cut rates again at the December FOMC meeting. There is currently an 85% chance the committee will lower rates by 25 basis points (bps).

As CoinGape reported, the Bitcoin price has reclaimed the psychological $90,000 level. This has come on the back of optimism of a third rate cut this year, with JPMorgan also predicting that the Fed will lower rates next month.

Experts such as Raoul Pal have also predicted that more liquidity will flow into the crypto market as the Fed ends QT and governments focus on printing more money, which debases fiat and makes a strong case for assets like Bitcoin.

Cathie Wood Also Addresses Bitcoin Prediction

During the webinar, Cathie Wood also addressed her readjustment of the 2030 target for Bitcoin from $1.5 million to $1.2 million due to stablecoins, which has taken one of Bitcoin’s competitive edges as a dominant force in emerging markets.

She noted that stablecoins have scaled into a billion-dollar industry while their issuers have become natural buyers of U.S. Treasuries. The Ark Invest CEO further described stablecoins as a “big force” and opined that this is only the beginning for this category of crypto assets, with more room to grow.

Meanwhile, it is worth noting that Cathie Wood’s firm continues to expand its exposure to the crypto market through crypto stocks. The firm bought $7.6 million worth of COIN stock this week. It also bought shares of Block, Circle, Robinhood, and Bullish and doubled down on Bitcoin by buying $2.8 million worth of its spot BTC ETF.