Author: Brayden Lindrea, Cointelegraph; Compiler: Deng Tong, Golden Finance
The CEO of ARK Invest said, Since the launch of Spot Bitcoin exchange-traded funds (ETFs) Since then, investors have begun switching from gold to Bitcoin (BTC).
“Bitcoin has been rising relative to gold. Now that there is a more convenient way to acquire Bitcoin, we think this substitution phenomenon will continue.”
strong>ARK Invest’s Cathie Woods said in a Feb. 4 conversation with chief futurist Brett Winton on the company’s YouTube channel.
Bitcoin vs gold chart shared by Cathie Wood of ARK Invest. Source: YouTube
Like gold, Wood expects Bitcoin to prove itself as a "safe-haven asset" when the banking industry shows signs of weakness.
The CEO of ARK Invest said that the market experienced this firsthand in March 2023, when the United States experienced a "regional banking crisis" that caused the price of Bitcoin to rise by 40%.
"The regional bank index is collapsing and now the regional bank index is underperforming again," she added.
“The idea that it’s a flight to quality or a flight to safety is reestablished here.”
According to a recent analysis by Fidelity, Bitcoin’s correlation with gold increases in 2023 and decouples from its previous inverse relationship with interest rates, despite a general increase in global interest rates.
The one-year rolling correlation between Bitcoin and gold currently stands at 0.80, which is the highest correlation level ever, according to data from Longtermtrends.
One-year rolling correlation between Bitcoin and gold. Source: Longtermtrends
Regarding the launch of the spot Bitcoin ETF, Wood said she was not surprised by the price correction - according to CoinGecko, Bitcoin went from 48,500 just hours after launch The dollar fell to $38,740 on January 24, down 20%. Ahead of the release, Wood predicted the release would trigger a "news sell-off."
However,she pointed out that 15 million of the 19.5 million Bitcoins currently in circulation have not been touched in 155 days and are therefore still in "strong hands," which may indicate that the Most Bitcoin holders are taking a longer-term view.
Wood’s company is one of 10 ETF issuers that launched a spot Bitcoin ETF on January 11, called the ARK 21Shares Bitcoin ETF.
BitMEX Research data shows that the Ark 21Shares ETF currently holds $705.8 million worth of Bitcoin after trading last week. Only Grayscale’s GBTC, BlackRock’s IBIT and Fidelity’s FBTC products hold more Bitcoin.
Cathie's ARK data shows that ARK Invest, led by Wood, also became a large buyer of cryptocurrency exchange Coinbase shares (COIN) in February 2022 and currently holds 7.187 million shares in multiple ETFs. Valued at $843 million.
However, the company has been selling COIN since June 7, when it held 11.43 million shares.
The Federal Reserve made a verbal statement to reduce the expectation of interest rate cuts. The lowered expectations of interest rate cuts and the weakened expectations of liquidity easing should suppress gold and BTC. However, gold and BTC responded to all this with an increase.
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