Key Takeaways
- Liquidity pressures may ease soon, says Cathie Wood.
- The investor’s $1.5 million Bitcoin bull price remains intact.
- Wood has continued to buy the dip of several crypto companies.
Ark Invest founder Cathie Wood says tightening liquidity conditions that have weighed on crypto markets may soon ease, while reaffirming the firm’s long-term bullish $1.5 million price prediction for Bitcoin.
Liquidity “Reversing” Soon
Wood said in the latest Ark Webinar that the recent liquidity tightening across AI and crypto “could reverse in the coming weeks.”
She described the current market environment as “turmoil” heading into December, but argued the squeeze is “temporary.”
Wood pointed to three factors she believes explain the pressure, and why it may soon dissipate:
- The Federal Reserve has not yet ended quantitative tightening, with the shift expected on Dec. 10.
- The U.S. government shutdown risk has passed.
- Interest rates have not yet been cut, with Wood expecting a move in December.
Wood said the funding squeeze affecting risk assets may be peaking and expressed confidence that conditions are now beginning to turn.
Wood Reaffirms Bitcoin Price Bullishness
Despite updating parts of its Bitcoin valuation model, Ark says its long-term stance remains unchanged.
During the webinar, Wood said stablecoins are taking on “one of the roles we thought that Bitcoin would play” as an “insurance policy for emerging markets.”
Stablecoins’ rapid expansion, now approaching $300 billion, has also created a “natural buyer for U.S. Treasury securities,” she said.
Ark analyst David Puell noted that Bitcoin adoption in emerging markets continues to lag stablecoins.
Bitcoin accounts for about “20%” of transaction volume in developing regions, compared with “40 and 50%” for stablecoins, based on Chainalysis data.
As a result, Ark “cut them into 20% of what they were prior” in its emerging-market safe-haven assumptions.
Puell added that the gold market has expanded sharply, rising from “around $17 trillion to $28 trillion,” which has helped offset downward revisions elsewhere in the model.
Despite the adjustments, Wood said the firm’s top-end view remains intact:
“Our bull price … really hasn’t changed,” adding that Ark is “still reiterating long-term bullishness here.”
Wood Buys the Dip
Wood has recently added more than $20 million in combined positions across Block, Coinbase, Circle and several other crypto-linked firms, according to Ark’s latest disclosures.
The firm also increased its holdings in the ARK-21Shares Spot Bitcoin ETF.
The purchases come during one of the steepest drawdowns for crypto equities this year.
Crypto-linked stocks have sold off sharply as uncertainty weighs on the sector. Block is down more than 20% this month, Circle more than 50%, and Coinbase roughly 30%.
The broader crypto market has also suffered.
Stablecoin market capitalization has fallen by around $4.6 billion since Nov. 1, according to DeFiLlama, while Bitcoin has dropped almost 25% over the month.
“Money is not just failing to come in, it’s actually leaving the crypto market,” 10X Research founder and CEO Markus Thielen told Yahoo Finance.
Kurt Robson is a London-based reporter at CCN, specialising in the fast-moving worlds of crypto and emerging technology. He began his career covering local news in Cornwall after graduating from Falmouth University with First Class Honours in Journalism. There, he cut his teeth on everything from council meetings to missing swans.
He quickly rose through the ranks to become a frontline journalist at several of the UK’s leading national newspapers. Over the years, he has interviewed musicians and celebrities, reported from courtrooms and crime scenes, and secured multiple front-page exclusives.
Following the upheaval of the COVID-19 pandemic, Kurt shifted his focus to technology journalism—just ahead of the AI boom. With a natural curiosity and a trained eye for emerging trends, he has found a new rhythm in reporting on innovation.
At CCN, Kurt's work focuses on the cutting edge of crypto, blockchain, AI, and the evolving digital world. Drawing on his background in people-first reporting and his deep interest in disruptive tech, Kurt delivers stories that are insightful, entertaining, and human-centric.
