Benzinga - by Adam Eckert, Benzinga Staff Writer.
Ark Invest's Cathie Wood believed a big part of the recent rally in Bitcoin (CRYPTO: BTC) was the result of a “flight to safety” that people aren’t talking about.
What To Know: Wednesday on CNBC’s “Squawk Box,” Wood acknowledged the momentum in Bitcoin was partially driven by a surge in demand following the approval of spot Bitcoin ETFs in January. But she suggested there was another piece to the puzzle being somewhat overlooked.
“There’s something else going on around the world,” Wood said. “There are currency devaluations taking place that people are not talking about.”
Wood told CNBC the Nigerian naira is down between 50% and 60% in the past nine months, Egypt’s currency was recently devalued by 40% and Argentina saw continued devaluation.
“I think this is a flight to safety — believe it or not — taking place, a hedge against devaluation, a hedge against a loss of purchasing power and wealth,” Wood said.
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The same thing happened last year in the U.S. during the regional banking crisis, she said, adding that as multiple banks collapsed, Bitcoin climbed 40%.
Wood told CNBC that Ark first bought Bitcoin at $250 when Greece threatened to leave the euro. She remains as bullish as ever on the crypto today.
At the Bitcoin Investor Day conference in New York last month, Wood upped her prediction for the future price of Bitcoin. She previously said it could reach $1.5 million by 2030, but if institutions end up allocating around 5% of their portfolios to Bitcoin, her projection would soar to $3.8 million by 2030, she said.
Many investors are looking ahead to the halving event later this month as the next potential catalyst for Bitcoin. Crypto markets have historically rallied in the months that follow a halving event, and given the institutional interest in recent months, a lot of investors are expecting Bitcoin to lead the charge.
Wood teased a new report from Ark Invest set to be released in the coming weeks. The firm argued in the report that Bitcoin is both a risk-on asset and a risk-off asset, she said.
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$BTC Price Action: Bitcoin was up approximately 0.85% over a 24-hour period, hovering around $66,500 at the time of publication, per Benzinga Pro.
Image: Benzinga using photo courtesy of Ark Invest.
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