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FameEX Hot Topics | Cathie Wood States Gold is Being Replaced by Bitcoin

2024-02-06 18:19:10

The shift from traditional gold investments to Bitcoin (BTC) has gained momentum, particularly with the introduction of spot Bitcoin exchange-traded funds (ETFs), as noted by Cathie Wood, the CEO of ARK Invest. During a February 4 conversation with ARK's chief futurist, Brett Winton, on their YouTube channel, Wood observed an increasing trend of investors choosing Bitcoin over gold. She attributed this trend to the easier access to Bitcoin provided by ETFs, predicting a continued shift towards the digital currency.

Wood articulated her view that Bitcoin is emerging as a reliable asset in times of financial uncertainty, drawing parallels to gold's historical role as a safe haven. This perspective was reinforced by Bitcoin's performance during the United States' regional bank crisis in March 2023, when Bitcoin's value surged by 40% amidst the banking turmoil. Wood highlighted this as evidence of Bitcoin's status as a flight-to-quality asset, asserting its role in providing a sense of security to investors.

Further supporting the connection between Bitcoin and traditional safe-haven assets, a Fidelity analysis indicated that Bitcoin's correlation with gold strengthened in 2023. This shift came despite a backdrop of rising global interest rates, challenging the previous inverse relationship between Bitcoin and interest rates. Data from Longtermtrends suggests that the rolling one-year correlation between Bitcoin and gold has reached a peak of 0.80, marking the highest level of synchrony to date.

The launch of the spot Bitcoin ETFs brought about a significant price adjustment, which Wood had anticipated. Despite a 20% drop in Bitcoin's price from $48,500 to $38,740 shortly after the ETFs' introduction, as reported by CoinGecko, Wood had foreseen this correction as a typical "sell on the news" reaction. However, she remains optimistic about Bitcoin's long-term stability, noting that a substantial portion of the Bitcoin in circulation, approximately 15 million out of 19.5 million, had not been traded for over 155 days. This observation suggests that a majority of Bitcoin investors are holding onto their assets with a long-term perspective in mind.

Wood's insights into the evolving relationship between Bitcoin and gold, alongside the impact of new financial products like spot Bitcoin ETFs, underscore a significant shift in investment strategies. This trend points to a growing confidence in Bitcoin as a viable and stable investment alternative to traditional assets like gold, signaling a potential paradigm shift in the landscape of investment assets.

Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.

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