Catherine Wood, Founder, CIO, and CEO at\u00a0ARK Investment Management, LLC\u00a0(aka \u201cARK\u201d or \u201cARK Invest\u201d), talked about Bitcoin while\u00a0speaking\u00a0during Cboe\u2019s \u201cExchanging Perspectives\u201d webinar (held on March 25).<\/p>\n
Wood believes that Bitcoin\u2019s market cap, currently about one trillion dollars, will in the future be a lot higher:<\/p>\n
\u201cIf we add all of the potential demand relative to the limited supply, we come up with incredible numbers over the long term. We have just begun. One trillion dollars is nothing compared to where this ultimately will be.<\/em>\u201c<\/p>\n She also mentioned increasing use of Bitcoin as a treasury reserve asset by publicly held companies such as Square and Tesla:<\/p>\n \u201cI think the most surprising development recently, and we didn\u2019t expect it when we wrote our institutional report, is that companies are now diversifying their cash with Bitcoin. We\u2019ve seen Square do this, Tesla do it\u2026 MicroStrategy is defining its business around it now.\u201d<\/em><\/p>\n One of the things that makes Bitcoin a very attractive asset class for Wood is its low correlation to other asset classes (even though it is worth keeping in mind that during times of financial stress, such as during March 2020, all correlations tend to go to one):<\/p>\n \u201cThe correlation of returns to other asset classes is extremely low. In fact, according to our analysis, the highest correlation is to real estate, 0.34. And so, it\u2019s what every asset allocator seeks, you know, non-correlated assets. We do believe this is the first new asset class, truly new asset class, since the 1,600s. Since equities.<\/em>\u201c<\/p>\n Wood also talked about how much of their portfolios institutional investors should allocate to Bitcoin:<\/p>\n