By cryptoadmin Renowned investor and ARK Invest CEO Cathie Wood made striking statements about the future of the global economy, technology, and especially Bitcoin in an interview with Anthony Pompliano. Wood argued that the world is on the brink of a major deflationary wave, and detailed what this means for cryptocurrencies.
Cathie Wood gave a clear answer to the question most frequently asked by investors: “Is deflation bad for Bitcoin?” According to Wood, Bitcoin is not only a hedge against inflation but also a safe haven in a deflationary environment.
Wood noted that “counterparty risk” is increasing in the traditional financial world (particularly in the private equity and software sectors). According to Wood, Bitcoin’s lack of ties to any central institution exempts it from such systemic risks.
Wood predicts that deflationary forces will shake traditional industries and believes that Bitcoin will stand out as a “hedge” in this chaotic environment.
He stated that due to the effects of deflation, traditional companies will have to adapt to new technologies more quickly, which will increase the value of innovative technologies such as blockchain and Bitcoin.
Wood argued that official government data (CPI/CPI) lags behind and that real inflation (using modern indicators like Trueflation) has fallen to as low as 0.8%.
According to the renowned investor, there are two main factors that trigger deflation:
- In particular, the fact that Artificial Intelligence (AI) training costs have decreased by 75% annually and usage costs by over 90% is driving down production costs.
- The fact that major brands have been forced to lower prices and the fall in housing prices indicate a decrease in demand.
Cathie Wood describes the current market situation as the “complete opposite” of the internet bubble of the late 90s. She says that back then, technologies weren’t ready yet, but today, robotics, energy storage, artificial intelligence, and blockchain technologies have reached their “prime time.”
Wood predicts that when the Fed recognizes deflationary pressures, it will be forced to cut interest rates much more sharply than expected. This low-interest rate environment and increased technological productivity could trigger a major bull run in the US economy and technology-focused assets (including Bitcoin).
*This is not investment advice.