Investor Cathie Wood On Bitcoin, Why She Sold Stocks In China, And What Her Firm Is Buying Now – Forbes

Cathie Wood, founder and CEO of Ark Invest, is bullish on Bitcoin and has sold stocks in China.

Cathie Wood, the wildly successful money manager known for making a huge bet on Tesla, weighed in on her support for Bitcoin, explained why her Ark Invest firm has sold nearly all the Chinese stocks it previously owned and talked about what her firm is buying now during an appearance on a panel Thursday. Heres what Woodwho appeared on Forbes list of Americas Richest Self-Made Women in August, with an estimated net worth of $400 milliontold the panel, moderated by angel investor and entrepreneur Jason Calacanis at PreMoney, a conference put on by venture capital firm 500 Global in Miami Beach, Florida.

BITCOIN

In September, Wood predicted that the value of Bitcoin would rise to $500,000 in five years. She remains a staunch supporter of Bitcoin, despite some in the crypto world losing their affinity for it. Theres a sense that the Web3 world is evolving away from Bitcoin and Ether into cheaper, faster cryptocurrencies, she said. But they forget that the more features and the more centralization you have youre talking about recreating Visa. That is, recreating an old structure in a new form. Wood said shed been hearing that Bitcoin is so yesterday. I think thats a big mistake. Look at whats going on in El Salvador.

Calacanis asked in response: You believe that dictator? You dont think hes a bad actor?

Wood replied that theyre giving $30 in each Chivo account [the digital wallets created for each citizen in El Salvador]. Pre Chivo, only 1.2 million people had bank accounts. Now 3 million out of 4 million eligible people in El Salvador have banking services.

Calacanis followed up: Most tech doesnt last more than a decade. Why would Bitcoin last any longer than that?

Wood answered: This is the most secure blockchain technology out there. Whats going on right now would have been [Nobel Prize winning economist] Robert Mundells dream: to introduce a global monetary system not under anyones control. (Wood explained that she studied under supply side guru Arthur Laffer an economist famous for the Laffer Curvewho was influenced by Mundell.) She elaborated: Look at Turkey. The Turkish people have lost half their purchasing power since February. Wouldnt it be nice to have a little Bitcoin?

CHINA

The topic turned to China, and the moves the Chinese government has made thisCK year regarding digital assetsbanning cryptocurrency exchanges and outlawing the mining of cryptocurrency. Wood said her firm had owned shares of Chinese e-commerce giant Alibaba, but had sold them along with other Chinese stocks. We own very, very few stocks there [in China] because theyre unpredictable. They are grappling with what most governments are grappling with: the gap between rich and poor. Wood added that 75% of consumer savings in China is held in real estate, and real estate values are starting to fall. Her analysis: That the Chinese government is willing to risk the decline in real estate values in order to address the wealth gap.

Calacanis put it this way: I think the mad king is circling his wagons because he feels threatened. Im talking about Xi Jinping.

Woods response: I think its to the benefit of the U.S. if China isolates itself. They are less likely to become the global superpower.

WHAT WOOD IS BUYING NOW

Wood said Ark has been buying Robinhooda stock that has fallen nearly 40% since its IPO in Julybut didnt elaborate on why. Also: Were looking for the digital wallet: Coinbase, Squares Cashapp, Paypals Venmo less so, she said. Most analysts are focused on banks, which we think are being hollowed out by defi and digital wallets. So shes staying away from traditional banks.

Two other stocks shes buying: video communications tool Zoom and cloud communications company Twilio, both part of a new wave of telecom tools. What I dont think people recognize is that we have not had a refresh cycle [in telecom] in 30 years. She explained: Im thinking about Cisco ... and the old telecom stack. Covid, she said, has inspired a new crop of options.

Calacanis asked about electric automakers (possibly Rivian, though he didnt specify), saying, Speaking of fraud, should a company thats sold zero cars be worth $150 billion?

Woods answer: Investing is about the future. Its not fraud, its perhaps misvaluation. I dont call that fraud at all. Regarding the crop of publicly-traded electric automakers with little to no revenues, Wood said: We called out Nikola. We knew what he [former chairman Trevor Milton] was saying was wrong. We knew that there was trouble. (In July Milton was charged with securities fraud by the U.S. Attorneys office in Manhattan; he pleaded not guilty). Wood also mentioned Rivian and Lucid, saying Ark doesnt own either stock. Why? They are going after niche markets. She said Ark has spoken to both companies about autonomous driving, which theyre not focused on. Woods take: Without autonomous drivers, neither can scalethough Rivian may be helped by its ties to Amazon, which owns a chunk of the company and has pledged to switch to electric delivery vehicles.

Her bearish take isnt exactly surprising, given the big bet shes made on those companies biggest competitor. Wood pointed out that ARK discloses its holdings at the end of each day and has done so since 2014. Its single largest holding, by far: Tesla, where Ark is sitting on a $2.4 billion stake.

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Investor Cathie Wood On Bitcoin, Why She Sold Stocks In China, And What Her Firm Is Buying Now - Forbes