Amid geopolitical tensions and record-breaking stock prices in global markets, renowned investor Cathie Wood shares her thoughts on the current state of the cryptocurrency market and the macroeconomic outlook.
Mr. Wood has provided important assessments on a number of important topics, from the correlation between Bitcoin and gold to the Federal Reserve’s interest rate policy.
Wood pointed out common misconceptions about the relationship between Bitcoin and gold. He noted that analysis since 2019 shows that the correlation between the two assets is just 0.14, and that gold has rallied before Bitcoin in past cycles, and that a similar process is currently underway.
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Despite Bitcoin experiencing a so-called bear market, Wood reiterated his long-term goals for Bitcoin, calling the 50% drop a “win” compared to historical declines of 85-95%.
- 2030 Baseline Scenario: $730,000
- 2030 Taurus Scenario: $1.5 million
Contrary to the prevailing view in the business community, Wood predicts that inflation will remain much lower than expected and will surprise markets. “We’re going to see a good wave of deflation,” he said, noting that advances in technology, particularly artificial intelligence (AI), are rapidly reducing costs.
Regarding the perception of “Fed hawkishness” in the market, Wood reminded that the federal funds rate actually fell by 175 basis points and claimed that the Fed had secretly entered into an easing process.
Referring to Trueflation data, a blockchain-based inflation measurement system, Wood predicts that core inflation has fallen to around 1.3%, forcing the Fed to cut rates further.
*This is not investment advice.
