Investors Turn To Bitcoin As A Hedge Against Devaluations, Says ARK Invest CEO

The renowned Bitcoin investor and CEO of Ark Invest, Cathie Wood, throws more light on the hedging function of Bitcoin. According to Wood, several fiat currencies face devaluations, with Bitcoin as a strong alternative hedge.

Moreover, the CEO noted that many people do not openly acknowledge the potential of Bitcoin, even though it has performed remarkably well. The recent impressive price surge in Bitcoin indicates that the token offers protection against loss of wealth.

Cathie Wood Highlights Reasons For The Rising Price Of BTC

Cathie Wood revealed the hedging potential of Bitcoin during a CNBC interview with Andrew Sorkin on Wednesday, April 3. When asked about Bitcoin's recent rally to a new ATH of $73,750 in March, Wood said the asset has become a hedge against high inflation for nations with less stable fiat currencies.

Further, Wood noted that though currency devaluation is eating deep into several countries, it has received little discussion.

There are currency devaluations that people are not talking about," says Ark Invest CEO @CathieDWood on the rise of $BTC. I think this is a flight to safety, believe it or not, taking place. A hedge against devaluation. A hedge against loss of purchasing power and wealth." pic.twitter.com/8NVh5NS9tP

- Squawk Box (@SquawkCNBC) April 3, 2024

To bolster her point, the CEO cited some countries with significant inflation rates, including Nigeria, Egypt, and Argentina.

Wood stated:

The Nigerian naira is down fifty, sixty per cent in the last nine months." Also, she mentioned that Egypt saw a 40% devaluation while Argentina has been battling a long-running devaluation.

Additionally, the asset manager emphasized that citizens from such countries are adopting Bitcoin as a hedge against fiat currency devaluation. Such a massive grab for BTC contributed to its recent explosive surge to over $73,000, according to Wood.

I think this is a flight to safety, believe it or not, taking place. A hedge against devaluation. A hedge against loss of purchasing power and wealth,"

Said Cathie Wood.

She cited how BTC surged 40% last year following the implosion of major banks in the United States. According to Wood, BTC is both a risk-off and risk-on asset without counterparty risk.

ARK Invest As A Major Bitcoin Investor

Cathie Wood's Ark Invest has been a prominent investor in Bitcoin. During the interview, she traced her company's history with Bitcoin. According to Wood, ARK purchased its first BTC holding at $250 per token in mid-2010, when Greece threatened to exit the European Union to tackle its debt crisis.

Ark Invest is among the entities that received SEC approval for a spot Bitcoin ETF trading as ARKB. According to data from BitMEX Research, ARKB is the third-largest BTC ETF in inflows, trailing behind BlackRock's IBIT and Fidelity FBTC.

As of April 3, Ark Invest's ARKB holds almost $3 million in assets, translating to approximately 42,873 BTC tokens. The ETF only faced a higher outflow than Grayscale on April 2. ARKB saw an outflow of $87.5 million in Bitcoin, compared to Grayscale's $81.9 million.

BTC has posted notable strides over the past few weeks. The flagship crypto asset has soared. Though it reclined from its all-time high, BTC is still nearly 134% higher than its price in the past year.

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