Key Points
- Cathie Wood, CEO of ARK Investment Management, views Bitcoin as a more significant concept than gold.
- Wood predicts that Bitcoin’s $2 trillion market cap could eventually exceed gold’s $15 trillion.
Cathie Wood, the founder and CEO of ARK Investment Management, has expressed her belief that Bitcoin is more substantial than gold. She predicts that Bitcoin’s current market cap of $2 trillion may one day overtake gold’s $15 trillion market cap.
Bitcoin: The Virtual Gold
On December 5, Wood responded to comments made by Federal Reserve Chair Jerome Powell regarding Bitcoin. Powell referred to Bitcoin, the cryptocurrency with the largest market cap, as a digital version of gold.
Wood stated that ARK Investment Management considers Bitcoin to be a much larger concept than gold. She compared the value of gold and Bitcoin, highlighting the potential of Bitcoin to surpass gold’s market value.
Bitcoin’s Market Value Potential
Gold, a commodity that has been on the market for a much longer period compared to Bitcoin, has a market cap of around $15 trillion. In contrast, Bitcoin’s market cap recently reached $2 trillion. Wood concluded that Bitcoin is still in its early stages and has the potential to surpass gold’s market value.
On December 5, Bitcoin broke the $100,000 ceiling for the first time in history, following a 5% increase in trading within 24 hours. Bitcoin’s market cap also increased by 5.74% to a value of $2 trillion. At the time of writing, Bitcoin is trading at $101,690.
Prior to Bitcoin’s significant leap to $100,000, Fed Chair Jerome Powell publicly defined Bitcoin as virtual gold. This is due to traders often using both assets to preserve the value of money rather than as a payment option. He views Bitcoin as more of a competitor for gold rather than the U.S dollar.
For years, traders have observed how the price movements of Bitcoin and gold often correlate, with Bitcoin usually following shortly after gold increases. This is largely due to both assets’ status as “safe-havens” that protect investors from the volatility of national currencies.
When the economy declines and national currencies start to fall, investors often turn to assets like gold and Bitcoin. This is because their value is not tied to a specific currency. Another common feature of these assets is their finite supply – both must be mined, albeit in completely different ways, before entering the market.