Amid geopolitical tensions in global markets and record-high stock prices, renowned investor Cathie Wood shared her views on the current state of the cryptocurrency market and macroeconomic outlook.
Wood made important assessments on many critical topics, from Bitcoin’s correlation with gold to the Fed’s interest rate policies.
Wood pointed out a common misconception regarding the relationship between Bitcoin and gold. He stated that analyses since 2019 have shown a correlation of only 0.14 between the two assets, noting that in past cycles, gold has risen before Bitcoin, and a similar process is currently underway.
Despite Bitcoin going through what is called a bear market, Wood stated that a 50% drop is a “victory” compared to past losses of 85-95%, and reiterated his long-term goals for Bitcoin:
- 2030 Baseline Scenario: $730,000
- 2030 Taurus Scenario: $1.5 Million
Contrary to the prevailing opinion in the economy, Wood predicts that inflation will surprise markets by remaining well below expectations. Pointing out that technological advancements, particularly artificial intelligence (AI), are rapidly reducing costs, the CEO said, “We’re going to see a good wave of deflation.”
Addressing the “hawkish Fed” perception in the market, Wood reminded that the Fed funds rate had actually fallen by 175 basis points, arguing that the Fed had secretly entered a loosening process.
Referring to Trueflation data, a blockchain-based inflation measurement system, Wood predicts that core inflation has fallen to around 1.3%, which will force the Fed to make further interest rate cuts.
*This is not investment advice.