Ark Invest's CEO stands by her prediction that Bitcoin will hit $1 million by 2030; Wood sold off some Coinbase shares on Tuesday as its price jumped.
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Ark Invest's Cathie Wood predicted that Bitcoin's strength during the recent banking crisis will bring back institutional investors who have been pushed away by regulators focusing attention on the bitcoins on their balance sheets.
Bitcoin is up almost 70% this year and 21% this month as small crypto-friendly banks like Silvergate and Signature were lost along with Silicon Valley Bank, and even mainstream banks like First Republic and Credit Suisse have been hit hard enough to require big rescues and in the latter's case, a bargain basement buyout.
Speaking to Bloomberg on March 21, Wood noted that "one of the things that happens in a crisis is liquidity dries out so that that tends to hurt assets." But, she added:
"The fact that Bitcoin moved in a very different way from the equity markets in particular was quite instructive… We do believe that the behavior of the price through this crisis is going to attract more institutions."
In a recent report, Ark recommended that institutional investors interested in digital assets should target 2.5% to 6.5% to Bitcoin, she said.
"So not crazy," Wood added. She said:
"These are the sorts of allocations they would have made to emerging new categories of assets. Like real estate in the '70s emerging markets, in small caps in the '80s and '90s."
In Ark's Big Ideas 2023 report, the base case Bitcoin price prediction was $682,000 by 2030, while the bear case was more than $250,000 and the bull case nearly $1.5 million.
Wood said the base case price, she believes, is "quite conservative."
Last week, Ark Invest revealed that it has raised $16 million for a new private crypto fund.
Selling Coinbase
Meanwhile, Wood, who has been buying swaths of Coinbase shares over the last few months, sold $13.5 million worth of COIN on March 21.
That's after Ark Invest bought about $30 million worth in February and another $30 million in the week of March 6. After its last buy, on March 10, Ark Invest owned 9.9 million shares of Coinbase. Wood has long been a strong supporter of Coinbase, despite its abysmal performance in 2022, when its share price declined 86%.
That said, she did make some big sells last year, dumping 1.4 million in July alone, although she bought a lot later in the year.
So what happened? Well, COIN is up almost 150% since the beginning of the year, closing at $83.99 on Tuesday after starting the year at $33.60. And it's up more than a third since March 10. So, while she is a long-term investor, a bit of profit taking does seem like a possibility.
