Following the approval of the spot Bitcoin ETF last month, there has been a strong influx of investments in cryptocurrencies from both individual and institutional companies. According to a bold statement by Cathie Wood from Ark Invest, Bitcoin is expected to replace gold as a safe haven for investors sooner than anticipated.
The Shift Towards Bitcoin
Cathie Wood, the head of Ark Invest, recently made some statements on YouTube and interpreted the situation from her perspective. Evaluating the current state of Bitcoin, Wood mentioned that the asset is increasingly becoming a risk-averse investment and could be a good option for those seeking quality amidst global economic uncertainties.
Wood also referred to the past, highlighting the bank failures that occurred in March of last year and pointing out the significant 40% increase that Bitcoin experienced on that day.
After comparing the past year to the present, Wood drew certain parallels and touched on some key points. She noted that Bitcoin’s strength following last year’s bank failures is parallel to the fluctuations seen in today’s global economy.
Wood, who refers to investing in Bitcoin as a “flight to quality,” also states that this trend is becoming increasingly evident. On the other hand, it is indicated that investors are turning more towards Bitcoin due to the uncertainties in the Chinese economy.
Wood commented on the drop in BTC prices that started with the launch of 11 ETFs last month, positioning the decline as a classic “sell the news” event orchestrated by market phenomena.
Wood shared a chart that shows the long-term movements of Bitcoin and gold together, supporting her views with this chart. According to Wood, this trend reflects the process of Bitcoin potentially taking over gold’s place in the investment landscape to some extent.
Wood made the following statement on the subject:
This chart shows you that Bitcoin is even rising compared to gold. There is now a substitution towards Bitcoin, and we think this will continue because accessing Bitcoin is much easier and less challenging.
Bitcoin or Gold in 2024?
While a new banking crisis is currently unfolding on Wall Street, companies are already announcing major layoffs for the year 2024. Bloomberg Intelligence strategist Mike McGlone shared his view that the US economy may be heading towards a recession in the future.
Proponents of Bitcoin believe that during this period, BTC could be a strong hedge against the collapsing bond and stock markets, while McGlone made a contrary statement.
According to Mike McGlone, Bitcoin may show weaker performance compared to the stock market in 2024 on a risk-adjusted basis.
McGlone also stated that contrary to the common market belief, the potential interest rate cuts by the US Federal Reserve, which are likely to benefit risky assets like Bitcoin, may not happen as expected. According to the analyst, gold could outperform Bitcoin in terms of performance throughout the year.
