Cathie Wood, the CEO of Ark Investment Management, recently shared her insights on the potential approval of spot bitcoin exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC). In an interview with CNBC, Wood expressed optimism about the approval and its impact on institutional investors.
Spot Bitcoin ETF Approvals: A Green Light for Institutions
Wood believes that the approval of spot bitcoin ETFs by the SEC will serve as a green light for institutions to invest in bitcoin. She stated that Ark Investment Management has been in discussions with several institutions, who have shown increased interest in bitcoin since the SEC started paving the way for ETF approval.
Probability of Approval and SEC's Questioning Process
When asked about the probability of her firm's spot bitcoin ETF proposal being approved, Wood expressed confidence in its high likelihood. She mentioned that the SEC, after previously denying similar proposals, has now started asking detailed and technical questions, indicating progress in the approval process. Wood believes that most participants have already answered the SEC's inquiries.
No 'Sell-the-News' Event Expected
Contrary to some predictions, Wood does not anticipate a 'sell-the-news' event upon spot bitcoin ETF approvals. She noted that the expectation of such a reaction has already led to positionings in the market. Wood emphasized that the long-term investment horizon of Ark Investment Management, along with the anticipated institutional flows, will drive the price of bitcoin higher.
Factors Driving Bitcoin Price Higher
Wood outlined several factors that she believes will contribute to the continued rise in the price of bitcoin. Firstly, she compared bitcoin to digital gold and highlighted the potential for substitution between the two assets. With gold being a $12 trillion asset and bitcoin currently valued at around $800 billion, Wood sees room for significant growth in bitcoin's market share.
Additionally, Wood emphasized the potential impact of institutional flows into bitcoin. Even a small allocation of 2.5% to 5% by institutions can have a substantial effect on the price. As these allocations gradually increase, the demand for bitcoin will rise, further driving its value.
The Scarcity of Bitcoin
Wood also mentioned the scarcity of bitcoin as a key factor in its price appreciation. With 19.5 million bitcoin already in circulation, and approximately 15 million held by long-term investors who have not moved their holdings in over 155 days, the available supply is dwindling. Considering that the total supply of bitcoin will only reach 21 million units, the scarcity of this digital asset is becoming increasingly evident.
Cathie Wood's expectations for spot bitcoin ETF approvals and their potential impact on the price of bitcoin reflect optimism about institutional adoption and the scarcity of this digital asset. As the SEC's decision on spot bitcoin ETFs approaches, the market eagerly awaits the outcome and its implications for the future of bitcoin.
What are your thoughts on Cathie Wood's views? Share your opinion in the comments section below.
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By: Kevin Helms
Title: A Look at Cathie Wood's Expectations for Spot Bitcoin ETFs and the Potential Impact on Bitcoin Price
Sourced From: news.bitcoin.com/ark-invest-ceo-expects-spot-bitcoin-etfs-to-attract-substantial-institutional-flows-pushing-btc-much-higher/
Published Date: Tue, 09 Jan 2024 03:30:34 +0000